Poor ‘will face loan shark danger’ after welfare cuts

Town halls in London today attacked the Government’s decision to scrap the £32 million emergency welfare scheme.

They argued the decision was “premature” and could undermine the work being done by the boroughs to help those most in need. London Councils, which represents all 33 local authorities, warned the poorest Londoners could be forced into the arms of loan sharks and payday lenders as a result.

Boroughs have already spent more than £5 million setting up the local welfare provision scheme and running costs for the first year. They were due to spend an additional £27 million a year. London Councils said it was “regrettable” that the decision to scrap funding from 2015/16 was made before the Department for Work and Pensions had carried out a promised review.

A DWP spokesman said: “Councils will continue to provide support to those in their community who face financial difficulties or who find themselves in unavoidable circumstances.”