This articlewas written by Patrick Butler, social policy editor, for The Guardian on Thursday 18th December 2014
Poverty charities and councils have warned that the government’s refusal to guarantee funding for local welfare schemes will force low income families in crisis to turn to food banks and loan sharks.
The government announced in January that it would no longer provide £180m central funding for local welfare assistance schemes operated by English local authorities after April 2015, triggering a cross-party revolt by Conservative MPs and council leaders, Labour councils and charities.
It is believed that the communities secretary, Eric Pickles, attempted to secure £70m for local welfare to announce in Thursday’s local government finance settlement, but was blocked by the chancellor, George Osborne.
The local government minister Kris Hopkins told the Commons on Thursday that there would be no additional funding for local welfare, although he encouraged councils to make further formal representations, raising faint hopes that the government may revisit the decision in February.
Local welfare provision offers emergency help for a range of vulnerable people who fall into unexpected crisis, including women fleeing domestic violence, homeless people, pregnant mothers, care leavers, pensioners and people suffering from chronic physical and mental health problems.
Some in Whitehall are understood to be concerned that cutting local welfare will provide additional fuel to critics who argue the government does not care about poverty. A cross-party report on food banks this month urged the government to protect local welfare assistance, saying food bank referrals would increase if it was not reinstated.
Hopkins said that although there would be no new funds for local welfare, ministers would outline a notional figure of £130m in the overall grant allocations to councils – a cut of £50m – although this would not be ring-fenced, meaning councils can spend it on other services.
Cllr Andy Hull, Labour-run Islington council’s executive member for finance, called the decision not to provide local welfare funding “an early Christmas present from the government for loan sharks and payday lenders.”
He added: “This safety net supports families to stay together, helps people sustain their tenancies and keeps kids out of care. It is a lifeline, not a luxury. Now, thanks to the government, it lies in shreds.”
The Local Government Association said almost three-quarters of local authorities will abandon or scale back local welfare schemes unless they receive government funding. Two county councils, Nottinghamshire and Oxfordshire, have already closed their schemes.
Alison Garnham, chief executive of Child Poverty Action Group, said:
“In the long-run tax payers will foot a higher bill if low-income families can’t stop a one-off, unforeseen expense from becoming a full-blown crisis – and the human cost will be high. For mothers leaving violent partners or youngsters moving on from homelessness or care, the schemes can make the difference between managing or not.”
Helen Middleton of the Furniture Reuse Network, whose member charities work closely with councils on helping low-income families, said the decision showed the government had “no real understanding of the levels of poverty in this country”.
Homelessness charity Centrepoint said young homeless people used local welfare schemes as a vital safety net:
“It’s completely unacceptable that young people who have fought to turn their lives around after facing homelessness are once again left to sleep on floors for lack of something as basic as a bed.
“Ministers must look carefully at responses from councils to this announcement and consider whether their proposal really reflects the level of poverty in many of our communities.”
Matthew Reed, chief executive of the Children’s Society, said:
“The government’s decision to reduce annual funding from £172m to £130m will make it harder for councils to support vulnerable families facing a crisis. The requirement that town halls fund their schemes from within existing budgets may create a postcode lottery for many families in poverty.”
Source – Welfare Weekly, 18 Dec 2014
Unfair funding cuts which hit poorest areas hardest would come to an end under Labour – but councils would still be forced to make savings, shadow ministers have warned.
Shadow local government minister Andy Sawford said Labour would draw up a new funding formula to ensure towns and cities across the North East were no longer targeted for funding cuts.
It follows warnings from the region’s MPs and council leaders that vital services such as social care, policing and fire brigades are suffering because the region is losing money while wealthy areas in the south are actually gaining cash.
But Mr Sawford also warned that a Labour Governmentcould only change the way funding was distributed and could not promise an overall increase in local authority funding.
He also revealed that failing private firms running the Work Programme, a Government scheme to provide unemployed people with training and advice about getting a job, faced the sack when their contracts run out in 2016.
> Well, that’s all of them then. But you’ll notice that they aren’t actually going to abolish Work Programme. It’ll still be a failing programme whoever runs it, simply because it refuses to adress the reality of employment and unemployment in the UK today.
Their role could be handed to voluntary organisations or to the public sector, he said.
> Which probably means it’ll end up being handed to the Jobcentres to run. Oh joy…
The Association of North East Councils has warned that cuts in council budgets in the North East amounted to £467 for every household between 2010 and 2016 – compared to just £105 in the South East.
Mr Sawford, also shadow minister for the cities, said: “The commitment we have made is that we are going to review the formula to ensure that local authority grants are based on a proper needs assessment.
“We’ll then get into how we do that at a time where we are not able to reverse the cuts. It’s not going to be possible.
“So it will be a financially tight time for all local authorities around the country.”
> Mr Sawford, also shadow minister for the cities, said: “We’ll tell you that we’re going to look at things, but nothing will change. Did you really think it would, suckers ?”
One authority has warned it is concerned about the effect of Septembers Scottish independence referendum on its finances.
Sunderland City Council said councils in the North East already faced “an un-level playing field” because Scotland was able to raise its own funds and control much of its own spending.
And Scotland was likely to gain even more autonomy even if voters rejected independence.
> So maybe we – closer to Scotland than London – should seriously consider joining an independent Scotland.
In a submission to the Local Government Select Committee, Sunderland called for local authorities to have more independence.
The council said: “It is Sunderland City Council’s consideration that without greater fiscal devolution to and beyond cities and City Regions areas like Sunderland are at risk of being caught between ‘a rock and a hard place’, between an increasing autonomous and confident Scotland and an increasingly prosperous and powerful London and the South East.”
> See previous comment…
Source – Newcastle Journal, 24 Jan 2014
Ministers have been accused of declaring “war” on the North East as MPs and council leaders gathered at Westminster to plan their fight-back against funding cuts.
> Well it’s taken them long enough ! Have they only just noticed what’s been going on under their noses ?
The region’s Labour politicians warned the debate about funding and grants obscured the real impact of cuts, which was worse public services and the prospect of councils running out of money.
Paul Watson, leader of Sunderland Council, said families in the North East would receive poorer police and fire services than those in wealthier parts of the country.
And the region’s politicians accused the Government of quietly scrapping the long-accepted convention that funding was allocated in part on the basis of need – so areas with higher levels of poverty, a higher proportion of older folk a low skills base or other pressing needs were given the cash they needed.
The change means a council like Newcastle is facing budget cuts while those in much wealthier areas are enjoying increases in funding.
The warnings were issued as council leaders delivered a presentation to MPs in a Commons committee room at Westminster, following a meeting with Local Government Minister Brandon Lewis.
> And they all said: “Bugger me, we had no idea this was going on. When did this start, then ?”
GatesheadMP Ian Mearns told the gathering: “There is a war being fought against our communities and it is being inflicted on us in the most ruthless fashion I can remember in my 30 years in politics.”
North Durham MP Kevan Jones added: “This is a war. They know exactly what they are doing. They are diverting money from our areas to areas in the south.”
A presentation produced by the Association of North East Councils (ANEC) warned that cuts in council budgets in the North East amounted to £467 for every household between 2010 and 2016 – compared to just £105 in the South East.
The discrepancy is partly a result of the Government abandoning the principle of funding based on “need”, which traditionally meant some councils received more than others.
A higher proportion of the North East’s population is elderly than the national average. The region also has more adults who need social care and long-term unemployment, as well as more children in care, all of which would traditionally have meant councils received higher funding.
But ANEC estimates that by 2019-20, Newcastle City Council’s spending power per household will be equal to the money available to a council in a wealthy areas such as Wokingham, in Berkshire.
Meanwhile, Newcastle North MP Catherine McKinnell, has revealed that a poll of her constituents shows that more than 90% of respondents expect their standard of living to get worse or stay the same over the next three years.
The survey on her website found that 79% of respondents were concerned by energy bills, 56% by food prices and 39% with the cost of transport.
> So now our Labour representives finally seem to have caught on to what’s going down. Question is, what are they going to actually do about it ?
Source – Newcastle Journal, 16 Jan 2014