UK cuts ‘will bite deep into council budgets’

03 November 2011

A GRIM warning of the way UK welfare cuts are about to impact on Scotland was given to MSPs yesterday.

Holyrood’s Local Government Committee heard that welfare cuts would “almost inevitably start to bite deeper and deeper” into council budgets.

The Welfare Reform Bill before Westminster involves changes which will impact on local authorities in Scotland, the committee heard, with one chief executive saying the cuts could lead to a rise in homelessness and failure to help address youth unemployment.

The Westminster reforms are intended to simplify the welfare system. Proposals include introducing a “universal credit” to provide a single benefit and devolving control of council tax benefit to local authorities, accompanied by a 10% grant cut.

But giving evidence to MSPs, Dundee City Council chief executive David Dorward, said: “I have concerns about welfare reform. We have not yet bottomed out what the likely implications of this, when it is fully implemented, are going to be.

“But intuitively, you feel from this there will be a big increase in homelessness. It will not assist with youth unemployment and that is a big concern for us in Dundee.”

The committee also heard from Lynn Brown, Glasgow City Council finance director and representative of the Chartered Institute of Public Finance and Accountancy.

She told MSPs that it was difficult to judge the budget implications of the reforms because the welfare reform legislation was still evolving.

She said the 10% grant reduction accompanying council tax benefit would equate to £7.5 million in Glasgow. “I am unsure that is fully accounted for in the settlement,” she said.

“It is a significant amount of money and there is little detail available at present.”
 

Source: The Herald website