Thursday, 21 August 2014

First councils to test changes warn they need more funding to get started

Benefits cap pilots claim DWP cash is not enough

The first four councils to test the government’s new benefit cap have warned they have not received enough money to implement the changes.

Enfield, Croydon, Haringey and Bromley councils on Monday became the first local authorities to implement the £26,000-a-year benefit cap. The councils must identify who is eligible for the cap and administer the new system.

The Department for Work and Pensions provided £2 million to help the four councils cover implementation costs, such as extra staff, administration, IT work and meeting any shortfall in housing benefit in the short term. The four boroughs have also each been allocated a senior Jobcentre manager to help people find work who are affected by the cap.

But the four councils have each said the money is not enough to cover their costs - in one case, less than half the amount needed.

Haringey Council, which received £115,350 from the DWP, has calculated that its costs will be £220,000 more.

Croydon Council, which received ‘just under £500,000’, said it had not been given the funds it felt it needed. A council spokesperson added: ‘We have had assurances from [Lord David Freud] that he will look at these issues as a matter of priority.’

Enfield Council, which received £815,000, could not provide figures for the total cost of the scheme. But a spokesperson said: ‘It’s difficult to know the scale of homelessness it may cause, in which case it might cost us a lot more.’

Bromley Council, which received the balance of the funding, declined to comment.

Every other council in England will implement the cap from July, with the policy coming fully into force across Britain by the end of September. No further DWP funding is available to help other councils implement the new system. The DWP would not explain how the allocations to the first four boroughs were decided.

Sir Steve Bullock, executive member for housing at umbrella body London Councils, said the early trial would do little to establish the impact of the cap on communities because no analysis would be carried out.

A DWP spokesperson said the department was working closely with the four councils to ensure the ‘right level of support.’

In numbers: total household benefit cap

£305 million amount the Department for Work and Pensions estimates the benefit cap will save by 2014/15

£26,000 total annual benefit cap for couples

£18,000 total annual benefit cap for single people

£65 million amount the DWP has made available in discretionary housing payments

Readers' comments (3)

  • A huge amount of benefits goes to landlords. Lack of rent controls of any kind is the problem for tenants in the private rented sector. That's where the overspend is.

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  • Alex Brown

    Moving costs from Welfare to make a saving is no saving if all it does is massively increase the costs to general council tax payers who have to fund homelessness costs.

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  • Alex Brown; It's not about saving, it's about getting people OUT of properties in a legal sort of way. They want people who live in London to be able to afford it! To do this they have to implement it nationwide. Why else do you think other councils are NOT getting any funding or help?
    Gerrymandering of the worse kind!

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