May 25 2013 Latest news:
Robin de Peyer
Monday, August 6, 2012
The £2.7m funding shortfall expected in Tower Hamlets after the Coalition’s welfare reforms come into effect will be picked up by the council.
The changes, which will result in a 10 per cent reduction in funding from central government for council tax benefit, come into force in April 2013.
The council claims that this will lead to a £2.7m hole in the budget, requiring it to either make up the cost or increase taxes to boost revenue. It has therefore decided to introduce a new scheme in an attempt to mitigate the imapct of the changes.
Tower Hamlets Mayor, Lutfur Rahman, explained: “While pensioners are protected under the new scheme, the changes would have negatively affected 25,000 working age residents in Tower Hamlets – the new means tested scheme will ensure that we continue to support the people who need it most.”
As well as announcing the council’s willingness to make up the shortfall when the reforms come into effect, Mayor Rahman criticised the Coalition’s plans for its wider changes to the benefit system, as well as announcing plans for a campaign to ensure the 4,000 residents affected are aware of the impact of the new benefit cap will have on their finances.
He said: “I am very worried about this latest attack on the welfare state. I am absolutely committed to helping them get the advice they need to reduce the impact of these changes on their lives.”
Labour Group leader Joshua Peck joined the Mayor in condemning the Coalition’s changes, but was unconvinced about the council’s plan to address the problem.
He said: “The Mayor seems very keen to spend money, but he is not clear about where the money is coming from in the future. We need a long term commitment, not a measure for just a couple of years.
“One of the biggest concerns I have is the lack of preparedness in the borough. The council has done really very little, and it’s hard to say people are aware of the support available to them.”