The benefits system is being thrown into chaos because local councils are expected to oversee radical changes without essential information from Whitehall, Midland authorities have warned.
Even Department for Work and Pension officials don’t understand how aspects of the new benefit system actually work, authorities said.
Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton councils issued the blunt warning in a joint statement to a Commons inquiry.
They said councils “have found it very difficult to obtain information regarding many of the reforms” – even though they are supposed to be carrying them out.
And the authorities warned they were struggling to meet the cost of overseeing changes to the benefit system, including installing new computer software and training staff, at the same time as coping with cuts to their own budgets.
Housing benefit is to be scrapped and replaced by a new benefit called Universal Credit. This will also include Jobseeker’s Allowance, Income Support, Child Tax Credit and Working Tax Credits.
At the same time, Council Tax Benefit and parts of the Social Fund – which provides emergency loans for people in financial difficulty – are being replaced with schemes designed and administered by local authorities.
Councils are also overseeing cuts to benefits for some residents, including social housing tenants who receive housing benefit and have spare bedrooms. This has been called a “bedroom tax” by Labour.
In evidence to the Communities and Local Government Select Committee, the councils said: “No one, and this includes Department for Work and Pensions regional staff, appears to fully understand how Universal Credit will be delivered in practice.”
But the new system was introduced in the North West on April 1 and comes into effect nationally in October.
“Whilst April and October 2013 loom even closer, there are still many details one would hope and expect to be in place and communicated by now.”
The Government had failed to explain to councils how they were supposed to impose welfare cuts, the authorities said.
“Some of the material made available to local authorities for implementing significant cuts to people’s benefit was not fit for purpose. It indicated a lack of understanding of the magnitude of the changes or a disregard for what local authorities had been tasked to do.”
The Department for Work and Pensions had also “been reluctant to provide detailed information about the delivery of the current social fund” – which meant councils didn’t know exactly how it worked even though they are supposed to be taking it over.
Meanwhile, councils were struggling to meet the costs of retraining staff and preparing computer software required by the welfare changes. “In summary there is not sufficient resource in place to maintain normal daily activities as well as preparation for the significant changes,” the authorities said.
Councils also warned that while the changes were confusing for their staff, they were even more confusing for benefit claimants themselves.
“Overall there is a significant level of concern and confusion amongst our customers about the future of the welfare reforms. The number and nature of those changes is adding to this.
“It is difficult enough for the professionals in this field to keep a handle on all of the changes, claimants have little or no chance of doing so.”
MPs said they were concerned that failure to prepare for the benefit reforms could leave the new system open to fraud.
Clive Betts, chairman of the Communities and Local Government Committee, said: “The Government must act to provide assurance that the benefit system will not be left vulnerable to fraud either during or after the transition. And it must do so urgently.”
He added: “We heard concerns that there may not be sufficient funding for local authorities to replace the national Social Fund given expected increases in demand... this is why we called upon the Government to sit down with local authorities to assess funding requirements.”
The impact of benefits cuts in Birmingham was revealed last week when it emerged more than 14,000 households face reduced incomes.
Birmingham City Council has carried out an assessment into the effect of the changes on the city– and they are so stark that a special task force is being created to deal with the fallout.
More than 2,000 people are to have their welfare payments capped in the city, and in excess of 14,000 families face cuts in housing benefit.
Coun John Cotton, Birmingham’s cabinet member for social cohesion and equalities, said: “We urgently need clear guidance. Local authorities up and down the country warned the Government about the potential problems and councils are now seeing a mass of increased enquiries from worried customers. That’s hardly surprising when you think that some people are now coming to terms with more than one reform. I’m worried that an already confused situation could get much worse later this year unless we get clear information ahead of the Universal Credit roll-out.”