Welfare cuts could hit care budget

Council chiefs have warned they might have to cut spending on care for older people in order to support households losing out through the Government's welfare reforms.

An investigation into the impact of Work and Pensions Secretary Iain Duncan Smith's radical overhaul of the benefits system estimated that less than a quarter of the 1.18 million workless households in England affected by housing benefit cuts would be able to move to cheaper accommodation or find a job.

This could force councils to pay out to support them, which would have a significant impact on other services, such as caring for vulnerable people, including older members of society.

The report, commissioned by the Local Government Association (LGA), also said the flagship universal credit scheme, aimed at ensuring claimants are always better off working, was 'unlikely to significantly increase employment'.

Councils would be forced to raid other budgets

The Government has made around £185 million available to councils for discretionary housing payments (DHPs). But Sharon Taylor, chairwoman of the LGA's Finance Panel, said councils would be forced to raid other budgets that are already being squeezed, to help tenants.

'Unless more is done to create new jobs and homes, households will be pushed into financial hardship and we will see a huge rise in the number of people going to their councils asking for help to make ends meet,' she said.

'Ministers must ensure councils have enough resources to meet demand. Local services have already taken the biggest cuts in the public sector and it would be wrong if councils had to reduce spending on other services such as caring for the vulnerable and fixing the roads to meet the new costs brought about by these changes to national policy.'

The study, carried out by the Centre for Economic and Social Inclusion, estimated that the income of households claiming benefit will be £1,165 a year - or £31 a week - lower in 2015/16 as a result of welfare reforms excluding the universal credit.

Overall, 45% of working age households receive one of the main benefits or tax credits, and 59% of welfare cuts will fall on working households.

Copyright Press Association 2013