FROM next month, the Benazir Income Support Programme is updating its cash transfer scheme by adopting the pattern successfully followed by some countries to weaken the poverty trap.

In partnership with the provincial governments, the BISP is preparing to launch the Co-responsibility Cash Transfer (CCT) Programme to link cash benefits to primary school enrolment and attendance of its beneficiaries’ children. Elsewhere, the term used has been conditional cash transfer (CCT).

Global experience suggests that CCTs can contribute significantly towards reducing the transmission of poverty to the next generation through better educational and employment opportunities.

Instead of relying on a large and expensive aid industry to find ways to help the poor, the new thinking has been that it is better to transfer money and resources directly to poor households so that they are able to find the most effective ways to escape poverty. This thinking did raise controversies over its effectiveness as far as ending poverty in the long run is concerned. But positive results in some countries showed that CCTs can work.

In recent years, success stories have been Mexico’s Oportunidades, Brazil’s Bolsa Familia and South Africa’s Child Support Grant.( India has its own National Rural Employment Guarantee Scheme). They provide money to poor families with the aim of improving their nutrition, making sure children go to school and ensuring expectant mothers have regular check-ups.

Brazil’s Bolsa Familia began as a municipal programme in 1994-95 and is built on domestic experience of what works to reduce poverty. Between 2003 and 2009, the income of poor Brazilians grew seven times as much as the income of rich persons. Poverty fell during that period from 22 per cent of the population to seven per cent. In Mexico, Oportunidades today covers 5.8 million families, about 30 per cent of the population.

Brazil’s conditional cash transfer programmes were begun before the government of President Luiz Inacio Lula da Silva, but he consolidated and expanded them. These now cover about 50 million poor, about a quarter of the population.

A monthly stipend of about $13 is paid to poor families for each child of 15 or younger who is attending school, up to three children. Families can get additional payments of $19 a month for each child of 16 or 17 years still in school, up to two children. Families that live in extreme poverty get a basic benefit of about $40, with no conditions.

In Pakistan, around 70 per cent of children of BISP beneficiaries are out of school at the moment and the new scheme of introducing co-responsibilities linked to primary education may lead to putting millions of Pakistani girls and boys in the schools, provided it is fairly implemented. At present, about 25 million people or15 per cent of the population live in extreme poverty. The BISP provides income support in the form of cash transfers to 3.5 million of the poorest families.

The World Bank supports the BISP through the Social Safety Net Technical Assistance Project with $60 million, approved by the bank’s board in May 2009. A proposal for $150 million IDA additional financing was approved by the bank’s board on February 7, 2012. This money would be utilised for the expansion of BISP’s cash transfers programme and its evolution towards Co-responsibility Cash Transfer (CCTs), linked to education of primary school-aged children of the beneficiary families.

The cash grant disbursements under the BISP had recently fallen by 48 per cent to Rs6.21 billion from Rs12.01 billion. Its beneficiaries also decreased by 29 per cent to 2.66 million from 3.75 million. The reason was the removal of the system under which cash grants were given to families through MNAs and Senators. Now the grants are given to those families which qualify for the poverty score card.

According to a progress report on poverty reduction strategy paper (PRSP) released by the ministry of finance, financial assistance to the poor and vulnerable has declined by 50 per cent and the number of beneficiaries of state-supported programmes by 43 per cent during the first quarter of the current financial year. About 74 per cent of the amount was disbursed through the BISP, 16 per cent through social security and welfare, seven per cent through the Baitul Maal and four per cent through the workers welfare fund.

A report in June stated that the Auditor General of Pakistan has detected irregularities in the payment of over Rs1billion to the Rural Support Programme Network in the BISP. These occurred in the award of three contracts in violation of World Bank guidelines for selection of consultants.

According to the report, the management of BISP awarded the contracts amounting to Rs1.70 billion for assignments titled ‘nationwide rollout of poverty scorecard for national targeting system’ under the project of social safety net technical assistance. The auditors pointed out that no provision was made in the contracts for submission of vouchers to the BISP for the reimbursement of the cost.

A Guardian report last month revealed that food banks are springing up across Britain to help starving families, showing poverty was on the rise in that rich country. The report says there has been a dramatic rise in the food bank phenomenon. The largest network of food banks in the UK, the Trussell Trust, a Christian charity, has doubled the number of people it feeds over the past year and that three new food banks are opening every week.

Most of the poor are Romanians who say collecting scrap metal and washing cars isn’t enough to make ends meet. Many are there because of benefit delays and cuts, or simply because they are no longer able to make their low wages stretch. The boom in Britain’s food banks reflects a number of worrying and complicated trends.

For the past couple of years, charities have been warning that a shift to a less generous way of fixing benefits in line with inflation, combined with rising food and fuel prices, would make life more difficult for people claiming benefits.

At the same time, the state system of a social fund and crisis loans is being wound down, so emergency cash payments from the welfare system for those deemed to be in extreme need are now exceptionally difficult to procure.