Government reforms to welfare are having a significant and growing impact on the cost of delivering local authority services. If local government is going to be able to mitigate the most serious impacts of welfare reform and also meet their legal responsibilities, the government must commit to a full and fair assessment of the new financial burdens that are arising for local authorities as a result of national policy change.
London local authorities have been working hard to communicate with their residents about the welfare changes, to get people into work and offer advice about financial management, skills and housing options.
Affected households are at risk of falling into rent arrears and being evicted if they are unable or unwilling to take steps to move into work, move to more affordable accommodation, or otherwise make up the shortfall that results from a benefit cut. This outcome is potentially extremely serious financial news for local authorities – even a very small increase in the need for temporary accommodation could cost London councils tens of millions of pounds per year.
Welfare savings at central government level that turn into a cost at local level aren’t true savings; it merely transfers cost and risk downwards and passes on a cost to council taxpayers and local services.
Government must therefore commit to a serious and fair assessment of the true costs of new financial burdens to local authorities arising from welfare reform at the earliest opportunity.
This extended briefing, part of London Councils’ Tracking Welfare Reform series, highlights some of the potential financial challenges for London local authorities that result directly from welfare reform and seeks to start a serious conversation with government about properly assessing new financial burdens. Read the report in full...