Public Policy Editor
The Government yesterday promised local authorities millions of pounds in compensation to meet legal obligations to asylum seekers which councils will continue to face despite ministers' moves to cut back on their benefits.
Conservative-controlled West- minster council and Hammersmith and Fulham dropped a High Court action challenging the regulations when the environment and social security departments confirmed they will meet 80 per cent of any unavoidable extra costs they face.
The move puts a dent into the pounds 200m savings that Peter Lilley, Secretary of State for Social Security, has said will be made by requiring asylum seekers to make their claim as they enter the country, and not later, and withdrawing benefits while they appeal against an initial refusal of asylum.
However, councils will retain a duty to house people under homelessness legislation until at least the summer when the Asylum and Immigration Bill is expected to become law, and a continuing duty beyond that to the children of asylum seekers under the Children's Act.
Westminster has estimated "conservatively" that its costs could be pounds 10m, with Hammersmith and Fulham predicting its costs over the next 12 months would be pounds 4m, with other councils also affected.
The decision was hailed as "a victory" by Iain Coleman, leader of Hammersmith and Fulham, who said it "makes a nonsense of the benefit changes. The Government said it wanted to reduce the burden on taxpayers by cutting benefits to asylum seekers. It now admits that one way or another a significant part of these costs have to be met and they couldn't get away with simply passing them on to local authorities."