Newham Council claim welfare reforms will cost £2.5m

The Mayor of Newham criticised the Government’s welfare reforms this week claiming they will cost the council £2.5m to introduce.

Newham Mayor Sir Robin Wales says his council has written to Iain Duncan Smith, secretary of state for the Department for Work and Pensions, expressing concerns about funding for implementing the Government’s housing benefit cap and the social housing under-occupancy penalty.

According to Newham Council’s calculations, the new policies could land them with a bill of £2.5m - due to an estimated increase in rent arrears from families whose benefits are unable to cover housing costs and to help them handle a possible influx in families needing housing.

The Mayor said: “The Government cannot implement new policy and simply expect local authorities to deal with the financial implications.

“It is a false economy to make central savings by transferring costs to local authorities.”

West Ham MP Lyn Brown also opposed the move. She said: “The people losing out aren’t skivers, but hard-working families just trying to do the right thing.”

A DWP spokesperson said: “We have committed £130m in Discretionary Housing Payments for Local Authorities to help vulnerable tenants, with nearly £2.5m going to Newham Council for 2013/14 alone.

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“Early findings from the Direct Payment Demonstration Projects are encouraging and show the vast majority of tenants are making rent payments.

“We are committed to working with all local authorities to ensure we fully understand the implications of our welfare reforms for councils and their staff.”