Norwich councillors warn �5m of savings would be needed to protect unemployed from benefit cuts

Labour officials have warned they would need to save �5m to protect unemployed and low-earning Norwich people from impending council tax benefit cuts.

Norwich City Council stands to lose �1.7m a year under government plans to reduce the national council tax benefit bill by 10pc from 2013.

District councils are expected to receive an average of 10pc less in government grants to provide benefits to their residents.

This policy is expected to force councils to either help fewer people or find other ways of making up the cash shortfall.

A further complication for councils is most pensioners and 'vulnerable people' will suffer no cuts, with councils expected to choose who is classed as being vulnerable.

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This means people of working age could lose more than 10pc of their benefit.

And Alan Waters, city council cabinet member for resources, told last night's cabinet meeting it was likely people on low incomes, or who received a 'reasonable level' of council tax benefit, would face 'additional hardship' under the government proposals.

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He said: 'We do need to do some careful thinking about this.

'It doesn't protect all pensioners but it is supposed to provide an incentive about work paying.

'Given the state of the economy, it's going to be a challenge for a number of local authorities, I'd imagine particularly in the north of England to deliver against this, but we will have to wait to see how this works out.'

A group containing councillors from the authority's three political parties will meet to decide how Norwich approaches the issue.

Mr Waters said: 'The government says 'well it's localism, if you want to pick up the cost of the additional 10pc', which for us it would be �1.7m from the yearly budget.

'We are quite welcome to go ahead and do that but it does raise some difficult situations that we would have to find up to �5m in future savings in the next couple of years.

'The other alternative is looking at council tax increases but these are regulated by the secretary of state.

'None of this is particularly palatable.

'It will be interesting to see what the definition of 'vulnerable person' is.

'If it's left to the local authorities to decide you could have a postcode lottery.'

Norwich City Council provides council tax benefit to around 19,000 households.

Claire Stephenson, Green Party opposition leader, said: 'This is an horrendous situation, which is being forced upon the council.'

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