Newcastle City Council said it would have to stop providing crisis loans to vulnerable residents

The BBC reports that a north-east council says government budget cuts are forcing it to use funding earmarked for vulnerable residents.

Newcastle City Council is using money previously ring-fenced for welfare and crisis loans on other frontline services.

Labour council deputy leader Joyce McCarty said it was facing “really tough choices”.

The government said local councils were best placed to decide priorities.

However, the government is proposing to cut a further £12bn from its annual welfare budget.

Funding for welfare grants and crisis loans was devolved to local control in 2013/14.

Ring-fencing was removed from 2015/16 and the cash now goes into the council’s central budget.

The authority said it could not prioritise discretionary loans over its statutory obligations and would only be able to allocate £120,000, compared with last year’s £229,000, for emergency welfare payments.

The Council had been forced to “make some really, really tough choices between providing frontline services and offering this level of support” to poorer residents, Ms McCarty said.

The Tees Valley Community Foundation, a private charity which helps to support those in need, said they expected more requests for help as a result.

Chief executive Hugh McGouran said he expected to see “a rapid increase” in demand.

“Twelve billion is such an eye watering figure,” he said.

“There’s going to be some significant cuts and I think people will start to turn more and more to charities to try and plug that gap.”

The government claim that nationally-run community care grants and crisis loans had been “poorly targeted and failed to help those most in need”.

“Local authorities now choose how best to support local welfare needs,” a Department for Communities and Local Government spokesman said.

“Additional money had been provided to assist authorities dealing with pressures on local welfare and health and social care,” he said.

However, I believe that this comment is little more than a platitude, intended to blur central government accountabilty. The government know precisely how much money is available to each council. How is it conceivable that local authorities have been provided with additional funding when this is offset with overall steep local authority budget cuts by the same government?

Moreover, the largest cuts have been made in the poorest areas, as the Institute for Fiscal Study (IFS) point out, with the same areas set to lose the most again over the next few years.

During the last term, local authorities in England with communities ranked in the top 20 per cent for health deprivation and disability have faced an average reduction in spending power of £205 per head – 12 times the average for places in the bottom 20 per cent.

Communities ranked in the top fifth for income deprivation affecting older people saw an average reduction in spending power of £229 per head while the average reduction for places in the bottom fifth was just £39.

Perhaps it’s worth noting that those authorities in the most deprived areas tend to be those that are predominantly Labour. This clearly indicates that the government is purposefully targeting Labour councils for dispropotionately higher cuts than Conservative ones.

The Joseph Rowntree Foundation (JRF) also point out that severe cuts to local authority budgets are having a profound effect on the services people receive. The poorest communities and residents are being hardest hit and those least able to cope with service withdrawal are bearing the brunt of the Conservative austerity drive.

It’s inconceivable that this isn’t intentional, targeted austerity on the part of the government.

The shadow Secretary of State for Communities and Local Government, Hilary Benn, said earlier this year that it was “irresponsible and unfair” for the Conservatives to have imposed the biggest reductions in local authority budgets on those communities with the highest numbers of older people living in deprived households.

“The A&E crisis in our NHS, driven in part by insufficient social care provision where it is needed, shows that the Tories can’t be trusted with vitally important health and social care services,” he said.