Fears for local economy as benefit claimants face £10M shortfall

A RADICAL revamp of welfare benefits, due to be implemented from 2013, will see claimants in the Borders lose nearly £10million a year.

The shake-up will also result in the loss of full-time staff at Scottish Borders Council (SBC) as the so-called universal credit (UC) replaces tax credits and means-tested benefits for working-age people.

As a result, the following benefits will go: income support, income-based jobseeker’s allowance, housing benefit, council tax benefit (both administered by SBC), working tax credit, crisis loans and community care grants.

At a private seminar last week, senior SBC officals told councillors of the impact on the region when the Welfare Reform Bill, going through its second reading in the House of Lords, is enacted.

The local effect of further changes, including the use the Consumer Price Index (CPI), which does not include housing costs, instead of the higher Retail Price Index (RPI) to calculate a range of allowances, was also quantified.

TheSouthern has obtained a copy of the briefing note on the annual losses due to be incurred by Borderers.

It reveals that more than 75 per cent of 1,110 housing benefit claimants will lose £504,000. The total number of disability living allowance (DLA) claimants will be cut by 20 per cent, resulting in annual losses of £4,094,678. The number of incapacity benefit/severe disablement allowance claimants (3,730) will be cut, leading to annual losses of up to £8,219,264.

The switch, for calculation purposes from the RPI to the CPI, will see 1,915 jobseeker’s allowance claimants lose £91,961 a year; 1,790 carer’s allowance recipients lose £84,703; 2,830 attendance allowance recipients lose £152,459; 12,300 families on child benefit for 22,450 children lose £1,021,375; 800 employment support allowance recipients lose £143,270; 2,460 income support recipients lose £143,270; and 3,250 incapacity benefit recipients lose £184,935.

The grand total of estimated annual losses in the Borders is therefore more than £9.95million.

The stark figures and the impact on the region’s parlous economy prompted Hawick’s six councillors – three Lib Dems, two Conservatives and independent David Paterson – to issue a joint statement this week.

“While we understand why in the present economic climate the UK government wants to scrutinise the welfare agenda, we are very concerned that if all the reforms come into effect as planned there will be a net loss to the Borders economy,” said Councillor Jock Houston (Lib Dem), chair of the Teviot and Liddesdale Area Committee, on behalf of the sextet.

“Recipients of the new universal credit should be allowed to choose whether to receive it weekly, fortnightly or monthly, rather than just monthly as proposed.

“It is proposed the UC should be paid to just one named person in the house; where there is a couple, we think there should be a choice as to whether all of it goes to one party or is divided between both parties.

“We feel very strongly that housing benefit should be paid directly to the landlord. It would be all too easy for a tenant to get into arrears. Similarly, council tax benefit, or whatever replaces it, should be paid directly to the council and not as part of UC.

“The government does not want SBC to have the power to investigate benefit fraud, but we disagree completely.

“We also object to replacing DLA with personal independence payment because there will be a six-month wait before determination of a claim and no provision for night-time care.”

Council leader David Parker said: “The changes will have an impact on the Borders economy and any loss of income to our economy is not welcome, but we also have to recognise that the welfare benefits systems needs to be fair and provide support for those who need it most.”

z In response to a recent Freedom of Information request, SBC has admitted that £929,000 was overpaid to housing benefit claimants in 2010/11. Just over £600,000 was recovered by council staff and, of the unpaid balance, £290,000 was obtained fraudulently.