Tuesday, December 04, 2012

A 13% default rate in Northumberland would mean the council would need to find over £1m to cover the shortfall.

Press Release
Warning to council on ‘hidden cost’ of Bedroom Tax
Estimates show council could be ‘millions’ worse off after controversial rule change

Northumberland County Council’s ruling Liberal Democrat are being warned that they face an ‘unprecedented squeeze’ on council budgets after Labour group leader Grant Davey unveiled figures that show the introduction of the coalition welfare changes in April 2013 could mean a ‘shortfall in council rent of over £1m’*.

Research by the Labour party in Northumberland shows that the most recent figures reveal that the council is paid £8,427,423 of rent income direct to the council but changes due to be introduced in April 2013 mean that rent will no longer be paid direct to the Council incurring an increase collection cost of £50,156.
The government has conducted 6 pilot programmes across the country to measure the impact of ‘direct payment’ and while the DWP have refused to give definitive figures of default on monthly rent payments, they did confirm that average defaults were ‘in the low teens’**.
A 13% default rate in Northumberland would mean the council would need to find over £1m to cover the shortfall.
Labour group leader Grant Davey who has called for Liberal leader of the council Jeff Reid to make a statement on the council’s preparedness for the changes in April 2013 said
‘First we’ve had Liberal cabinet member Tom Brechany deny that some people may lose housing benefit in the county because of the government welfare changes, then the Liberals denied there was a ‘growing housing problem’ in the county despite the independent National Housing Association confirming the council’s record waiting list ‘was a potential housing time bomb’*** and now these figures show the council may have to find a further £1m to cover potential defaults after the introduction of Universal Credit in 2013. It’s time the Liberals got to grips with this issue and it’s time that Jeff Reid showed some real leadership. We’ll be pushing him to release the facts on the true impact of the Universal Credit changes in the county’.

* Agenda Item: 4.5 - IMPACT OF WELFARE REFORM - Report by Allan Hepple Director of Neighbourhood Services
** BBC website – Mark Easton http://www.bbc.co.uk/news/uk-20459252
*** - Berwick Advertiser New report warns of ‘housing timebomb’
Published on Sunday 2 December 2012 10:00 – NHA Home Truths: North East 2012

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