North East councils hit back at the Government in money row

Bedroom tax support funding is "totally inadequate" for Newcastle's needs, says council

Employment Minister Esther McVey, centre, said money was still available to North East councils
Employment Minister Esther McVey, centre, said money was still available to North East councils

A battle of words has broken out between North East councils and the Government after ministers accused the region of sitting on money that is needed to help thousands of families.

Employment Minister Esther McVey said there is still a large amount of cash available to North East councils to help those claiming housing benefits.

According to Government figures, councils in the North East spent £2.3m in the first six months of 2012/13, from a pot of money totalling £5.1m specifically designed to help people affected by the removal of the spare room subsidy – or bedroom tax – and the introduction of the benefit cap.

But Newcastle City Council said the city is on track to fully spend its allocation of the Discretionary Housing Payment (DHP).

“The figures being quoted are three months out of date,” a spokesman for the council said. “As of today the council has given out £511,243 in DHP to help its residents – that’s 74% of the money we have allocated with three months left to go – far higher than the 42% being quoted in the Government’s table.

“It is not the case that the council is sitting on money that is needed to help residents and in fact is on target to spend it if you take into account monthly intervals over the year.

“In reality, the funding available is totally inadequate to meet the needs in the city.”

The Government says it tripled the DHP fund this year to £180m to help people adapt to controversial welfare reforms. It says the removal of the spare room subsidy aims to free up space for the 375,000 families in England and Wales, who live in overcrowded accommodation, while around one million rooms go spare in under-occupied social housing.

Miss McVey said: “There is a significant amount of cash still available to councils to help people who need extra support to make the transition to the new system for claiming benefits – despite scare stories that support would not be sufficient.

“It is encouraging that the vast majority of councils appear to be spending the money wisely and ensuring it goes to the people who need it most.

“But the cash is there to be used and we urge people who need an extra bit of help to contact their council.”

But Newcastle City Council said the funding available for the city is just one-seventh of the funding cut by Government through the bedroom tax, affecting over 5,000 households in Newcastle. The council confirmed it will be bidding for additional funds from Government to top-up the support available.

Gateshead Council’s strategic director of finance and ICT, Darren Collins, said: “Far from having an underspend in the discretionary housing payments funding, we have seen a huge demand and have been looking at ways to increase the support we can offer.

“We have recently been given Government permission to redirect some resources from within existing council housing budgets to help alleviate the real hardships that some of our residents are facing.

“This does of course mean yet further strain on council finances at a time of significant funding reductions.”

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