Tagged: Local Welfare Provision.LWP

North councils left with funding shortfall after those left reeling from bedroom tax cry for help

Cash-strapped North councils have diverted more than £300,000 of funds to top up Government help for those left reeling by the bedroom tax.

Welfare reforms have seen changes made to benefits which have forced many to seek smaller housing while scores of others struggle to pay their rent.

Thousands applied for Discretionary Housing Payment (DHP) cash payments to get by, but now many councils have spent over the amount allocated by Government and have had to find extra funds from elsewhere.

Fears are also spreading the situation could get worse as authorities may be even more out-of-pocket next year when the Government will cease to offer DHP funding.

Hartlepool Council had one of the highest deficits – £115,239 – with the total spent on DHP hitting almost half-a-million pounds.

In Gateshead, the overspend was £90,000, after the authority spent £583,000. Chiefs will now bid for extra DHP cash as the council foresees a further shortfall.

Sunderland City Council spent £690,000 and had a shortfall of £32,000. North Tyneside Council reported an underspend while Durham County Council was granted additional DHP funds to cope with demand.

In Middlesbrough the figure was £37,420, Redcar and Cleveland spent £5,000, while Stockton was the lowest over their allocated funds at £932.

Both Hartlepool and Middlesbrough councils said they met the shortfall by using money from the Local Welfare Provision (LWP), which can also be used to help people struggling with welfare reforms.

But the LWP will also be removed by the Government from April 1, 2015.

South Tyneside Council was left with a shortfall of £8,000 after granting £314,000 worth of DHP applications.

Meanwhile Newcastle City Council – which by far paid out the most DHP grants at £1.5m – was granted an additional £861,000 in DHP cash from the Government to cope with almost 3,000 applications.

Coun Dave Budd, Middlesbrough’s Deputy Mayor and executive member for resources, said: “The Coalition Government’s welfare reforms have placed a great many people in real hardship.

“From a very early stage we have been working with many partners – including local housing providers and the Citizens Advice Bureau – to address issues which can have a devastating effect on people’s lives.

“With the removal of the funding for the Local Welfare Provision from April next year, it will become even tougher to help those most in need. However, we will continue to do everything in our power as a local authority to mitigate those impacts.”

Labour Parliamentary Candidate for Redcar Anna Turley highlighted the situation, saying: “David Cameron and Nick Clegg’s bedroom tax has been a disaster for the hundreds of thousands of people hit by the cruel levy and it has come at a huge cost for local taxpayers.”

However, the DWP says more than £20m specifically earmarked to help people adapt to welfare reforms was not spent by UK local authorities last year.

Figures show almost two-thirds (63%) of councils paid out less than their total DHP allocation to tenants.

A spokesman for Hartlepool Council said: “The council recognises the significant detrimental impact that the bedroom tax is having on households and as a council we are doing everything possible to ease the pain for residents.

“In 2013/14, the Government’s introduction of the bedroom tax resulted in reduced housing benefit entitlements in Hartlepool of over £1m and affected over 1,400 households.”

Minister for Welfare Reform, Lord Freud, said: “We tripled support for vulnerable people to £180m last year to ensure the right help was in place during our far-reaching welfare reforms.

“The figures also show that recent scare stories about councils running out of money were grossly exaggerated.

“Our vital reforms are fixing the broken welfare system by restoring fairness for hardworking people and making sure work always pays, as part of our long-term plan.”

> The long-term plan evidently being to return Britain to being a feudal society…

Source – middlesbrough Evening Chronicle, 31 Aug 2014