Newcastle City Council 'forced' to plunder welfare funds

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

A north-east of England 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, it said.

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

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

It is proposing to cut a further £12bn from its annual welfare budget.

Joyce McCarty said the council could no longer do what it had once been able to do

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.

It 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 support those in need, said it expected more requests for help as a result.

Hugh McGouran expects to see a rise in the number of people coming to his charity for help

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 said 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.