Dundee City Council’s chief executive has warned wide-ranging cuts to benefits could cause a ”big increase” in homelessness.
David Dorward also told MSPs he fears the controversial reforms now going through Westminster would burden local authority budgets and possibly lead to an increase in youth unemployment.
The Coalition Government’s Welfare Reform Bill includes a series of measures that have been described as the most radical changes since the creation of the welfare state.
Among planned reforms are an overall cap on a family’s benefits of £26,000 and new tests for those claiming incapacity benefit.
A single universal credit will replace six income-related work-based benefits and control of council tax benefit will also be devolved to councils, accompanied by a 10% cut in block grants.
Prime Minister David Cameron has insisted the changes will simplify the welfare system, but they have provoked anger from opposition politicians who believe they will hit the poorest hardest.
Giving evidence to the Scottish Parliament’s local government committee on Wednesday, Mr Dorward suggested the legislation would cause major problems.
Speaking in his role with the Society of Local Authority Chief Executives and Senior Mangers, he said: ”I have concerns about welfare reform. We have not yet bottomed out what the likely implications of this, when it is fully implemented, are going to be. But intuitively you feel from this there will be a big increase in homelessness.
”It will not assist with youth unemployment and that is a big concern for us in Dundee. These are all issues that are going to make the demands on our services people who are not in need at present but will be in need in the future greater.
”I don’t think we have factored that into future budgets. It may not have a great effect on 2012-13 we don’t know yet but it will almost inevitably start to bite deeper and deeper moving into 2013-14 and onwards.”
The committee later heard evidence from Kevin Keenan, the leader of the Labour group on Dundee City Council. He said the budget settlement for councils is a difficult one and also highlighted welfare reform as an area of concern.
”One of the big challenges facing local government is welfare reform and the unknowns within that,” he said. ”This would have a significant impact to local government and it is something we will continue dialogue with government to try to resolve.”
Also appearing before the committee was Lynn Brown of the Chartered Institute of Public Finance and Accountancy. She told MSPs it is difficult to judge the budget implications of the reforms because the legislation is still evolving.
She said the 10% grant reduction accompanying council tax benefit would equate to £7.5 million in Glasgow.
A spokeswoman for the Department for Work and Pensions said: ”Our wide-ranging reforms will have a dynamic impact on some of the poorest families, encouraging people into work, many for the first time, and improving the life chances of children at an early age.
”Universal credit will make work pay and lift almost a million people, including 350,000 children, out of poverty.”
Photo Ian Nicholson/PA Archive