The first four councils to test the government’s new benefit cap have warned they have not received enough money to implement the changes.
Enfield, Croydon, Haringey and Bromley councils on Monday became the first local authorities to implement the £26,000-a-year benefit cap. The councils must identify who is eligible for the cap and administer the new system.
The Department for Work and Pensions provided £2 million to help the four councils cover implementation costs, such as extra staff, administration, IT work and meeting any shortfall in housing benefit in the short term. The four boroughs have also each been allocated a senior Jobcentre manager to help people find work who are affected by the cap.
But the four councils have each said the money is not enough to cover their costs - in one case, less than half the amount needed.
Haringey Council, which received £115,350 from the DWP, has calculated that its costs will be £220,000 more.
Croydon Council, which received ‘just under £500,000’, said it had not been given the funds it felt it needed. A council spokesperson added: ‘We have had assurances from [Lord David Freud] that he will look at these issues as a matter of priority.’
Enfield Council, which received £815,000, could not provide figures for the total cost of the scheme. But a spokesperson said: ‘It’s difficult to know the scale of homelessness it may cause, in which case it might cost us a lot more.’
Bromley Council, which received the balance of the funding, declined to comment.
Every other council in England will implement the cap from July, with the policy coming fully into force across Britain by the end of September. No further DWP funding is available to help other councils implement the new system. The DWP would not explain how the allocations to the first four boroughs were decided.
Sir Steve Bullock, executive member for housing at umbrella body London Councils, said the early trial would do little to establish the impact of the cap on communities because no analysis would be carried out.
A DWP spokesperson said the department was working closely with the four councils to ensure the ‘right level of support.’