Question over future of Tower Hamlets’ council tax benefit scheme

The future of a local fund paid out of Town Hall coffers to “protect” families in London’s deprived East End hit by government cuts to Council Tax Benefits is in question.

The local authority which has been cushioning the impact of April’s cuts from public coffers now has to decide whether to continue paying out next year.

Whitehall cash given to local authorities for such local schemes is 10 per cent less than previous funding allocated to the national benefits scheme, which means a shortfall of £3 million in Tower Hamlets alone.

The Town Hall was faced with either passing on the cuts to families by cutting their Benefit, or absorbing the cost into the council’s budget.

It chose to absorb the cost for the current financial year up till next April.

Mayor Lutfur Rahman said: “We protected 25,000 households from Benefit cuts at a time when welfare reform began to make finances a real challenge for families.

“We hope to continue this scheme and support all residents as government cuts continue to bite.”

But the authority must decide what to do next year and has started online public consultations on whether to continue paying out to families hit by the cuts, weighing the needs of those on low income with the cost of the scheme on the public purse.