HUNDREDS of Hartlepool households financially crippled by the controversial bedroom tax look set to be given some respite for up to four months under new council plans.
Hartlepool Borough Council is considering using £346,000 to support 1,581 affected households for a total of 16 weeks.
The move has been welcomed by families affected, including Julie and Mark Bell, the parents of seven-year-old cancer victim Becky Bell, and Hartlepool artist Jason Gaffney.
Council leader, Labour councillor Christopher Akers-Belcher, said: “The plan is to give everybody affected by the bedroom tax 16 weeks assistance, which equates to £218 per household.
“In hard financial times we are trying to make the best use of the resource and this fits in with our aim to help those hardest hit and most in need.”
Coun Akers-Belcher, who said it will help put money back into the local economy, said if the plans are backed by full council then people will either get the money as a credit on their account or it could help clear rent arrears.
The bedroom tax came into force on April 1 and affects social housing tenants in employment and those in receipt of housing benefits if they have any unoccupied rooms.
Households under occupancy have their benefits cut by around £13 each week for one bedroom or £22 for two bedrooms.
Latest figures show in Hartlepool, 1,581 households have been affected with the average weekly loss of housing benefit of £13.67 a week and the annual value of housing benefit reductions in Hartlepool is £1.123m.
Councillors say that is more than £1m taken out of the town’s economy since it was introduced and have welcomed the new plans to provide residents with some much-needed respite.
The plan is to support every household affected with a credit to their rent account.
It is possible as there was an underspend of £100,000 from the Local Welfare Support (LWS) scheme budget after the first three months of the financial year and finance chiefs say if current trends continue then the total will be around £400,000.
In April, the responsibility of helping some people with general living expenses was transferred from the Department for Work and Pensions (DWP) to the council.
The idea was to provide a more “targeted approach” for those most in need and people are assessed as either in crisis, or non crisis, depending on their circumstances, with people in crisis for example classed as those in need of help after flooding, a gas explosion or house fire.
But there has been a significant underspend in the budget, which finance chiefs say is “consistent” with the national and regional picture.
Therefore, the council has developed a strategy to use the underspend and help support those hit by the bedroom tax.
A report by John Morton, the council’s assistant chief finance officer, said: “The welfare reform that has had the greatest impact and profile locally has been the bedroom tax changes.
“It would be possible to support every household affected by the bedroom tax with a credit to their rent account.”
Mr Morton added: “Households affected by the bedroom tax changes have been losing on average £13.67 per week since April 2013, which equates to a full year average loss of £710.”
Councillors on the finance and policy committee have backed the plans which will now go before full council on Thursday, September 5.
Labour councillor Robbie Payne said: “£1.1m has been taken out of the Hartlepool economy.
“That is a hell of a lot of money and needs to be highlighted.”
The council’s LWS allocation of around £530,000 is not ringfenced, but the council is accountable to the DWP for how it is spent.
Mr Morton said this is the first year the council has had responsibility for LWS and it would “be prudent” to keep a contingency pot in case the demand increases over the rest of the year.
The plan is to have a £50,000 contingency fund with the remaining £4,000 from the underspend going to foodbank initiatives.
The DWP have not yet confirmed the 2014-15 LWS allocations and officers say there is a “significant risk” it may be reduced by central government in future.