Former Lib Dem leader Kirsten Bayes questioned the way the cabinet was intending to use the crisis fund intended to mitigate the harsh effects of the Welfare Reform Bill, which will cap benefits.
She also mentioned the cabinet’s plan to make people receiving council tax benefit pay the cost of the transfer of the scheme from the Department of Work and Pensions (DWP) to local authorities – with a 10% cut in funding.
Ms Bayes asked the cabinet last Monday:
Given the way that the council has chosen to take between £1.2 million and £1.8 million from Reading’s poorest residents via the new council tax charges – on its own figures post changes to council tax benefit – how can it justify spending £42,000 on admin costs to administer £412,000 of grants for welfare support?
Would it not be better to let the poorest residents keep more of their own money?
Leader of the council, Cllr Jo Lovelock explained the Welfare Reform Act ended the current DWP responsibility for supporting those facing crises.
It did not pass the statutory responsibility to local authorities, but outlined the expectation that they would “create a local provision that best meets the needs of some of the most vulnerable members of the community”.
She said the council would get £454,668 in the coming year and £448,054 the year after to mitigate the effects of the introduction of welfare reforms.
There was no sign of continuing funding after that.
She said the cabinet would establish a Financial Crisis Support Service giving targeted advice, developing the capacity of the voluntary sector through council grants to provide help and offering a discretionary service for some direct financial support in cases of exceptional need.
The administration cost of the service would be £42,000.
Cllr Lovelock said:
The council can hardly be expected to give out public money without a proper process and if we are to ensure that those in crisis get that help quickly then dedicated staff will be necessary both for the benefit of recipients and to ensure the spending is properly accounted for.
She derided a suggestion by Ms Bayes at a previous meeting that other local authorities were absorbing the 10 per cent shortfall in council tax support and not passing the cost on to the people receiving benefits.
Reading Borough Council has decided to pass on the cost, which will mean that people who receive council tax benefit will from April have to pay £15 a month for 10 months.
Cllr Lovelock said she had only been able to find one small district council in Hampshire actually absorbing the cost.
She said it was able to do it because it was a small, well-off authority with relatively few people on council tax benefit and was able to absorb the much smaller cost. In Reading the shortfall was £1.2 million:
Instead of trying to play the Government’s game and blame the local councils who are in increasingly difficult situations, I would suggest to Ms Bayes that she joins in with Lib Dem MPs such as Sarah Teather who are increasingly vocal in their concerns about the Goverment’s approach to welfare reform.