The payment card arrangement will provide a significant income stream to Asda funded from claimants in financial crisis; Asda is part of the Billion dollar US transnational Walmart.
Answering questions from members of the public, the Cabinet member for Social Inclusion, Cllr John Cotton revealed that the award of the contract was delegated to officers who conducted the procurement in less than ten weeks. Asda, being the only company able to respond within this time-scale.
The questioner had sought to find out what political decision had been made to pursue payment cards, but it appears that the Cabinet dealt with the issue as a technical matter when they met in January and rubber stamped the decision to procure the cards.
Critically the Cabinet member confirmed that there had been no consultation with claimants directly affected by the move, claiming that third sector organisations had been consulted on their behalf.
The use of payment cards is controversial as it restricts the choice of claimants as to where they can shop and for example would prevent them from shopping at the markets or local shops where items might be cheaper. They also risk identifying and possibly stigmatising the payment card holder as a claimant in financial crisis.
Following the abolition of the Social Fund by the Government responsibility for providing Crisis payments and Community Care Grants moved to Local Authorities on 1st April. Councils have been freed to make their local arrangements for Local Welfare assistance.
Challenged to explain why cash payments could not be made as a non-stigmatising form of crisis payment, Cllr Cotton’s answer seemed to suggest that payment cards were a cheaper option relative to the costs of security and the administration of handling cash.
But the question still remains as to why claimants cannot be paid by Bankers transfer or through a pre-paid debit card?
There is also a question as to why Birmingham City Council is dealing with a company like Asda.
When the Labour Group was elected in May last year it was committed to introducing a Business Charter for Social Responsibility.
One year on the still draft charter proposes that companies contracting with the Council should support the fundamental International Labour Organisation conventions and to pay the living wage to their workers. Asda arguably fails on both these points and should be excluded through its exploitation of unpaid forced labour through the use of Workfare.
Birmingham Council received £6.1m for this financial year from the DWP to fund the local welfare assistance scheme. Funding for 2014-15 is frozen and represents a real terms cut at a time of increasing need caused by the impact welfare reform programme.
After the meeting one of the questioners stated:
Asda-Walmart are the recipients of significant corporate welfare benefiting from the exploitation of the claimants forced into workfare and now a payment card deal funded by public money. We need to know the financial benefit of this payment card scheme to this company?
At the same time Birmingham Council is saying that they do not trust claimants to spend their money responsibly, this buys into the Government’s attack on claimants. The Council should immediately consider other forms of payment that shows full respect for the dignity of claimants.
The public questions can be viewed at: