THE housing benefit bill was underestimated by £13.5 million in Waltham Forest, a Freedom of Information Act (FOI) request has revealed.

As chancellor George Osborne announced his aim to cut the nation’s housing benefit bill by nearly £2 billion, an FOI disclosure to Inside Housing Magazine reveals poor forecasting by local authorities left the government owing almost £600 million.

Waltham Forest Council predicts how much housing benefit it will need at the start of each financial year, but figures show the authority has one of the biggest shortfall’s in the country.

Bristol Council, which has the largest housing benefit gap in the UK of more than £14 million, blamed the recession and change of government.

A spokesman told Inside Housing: “Obviously any major economic or legislative changes can have sudden financial impacts that are unprecedented and can account for differences between the estimates and outturn.”

Some experts have also warned that the proposed reforms to the housing benefit system will create more uncertainty for councils as changes are phased in over several years.

Cllr Afzal Akram, Waltham Forest's Cabinet Member for Corporate Resources, Business & Employment, said: "Most of what the Council pays out in housing benefit is claimed back from the Department of Works and Pensions (DWP).

"We are asked to submit three claim forms throughout the year and, at the end of the financial year, any balance owed to the Council is paid by the DWP.

"By contrast, if we had overestimated (as many local authorities did) we would have to reimburse the DWP.

""While our estimate for August 2009 took into account the worsening economic situation, the number of claims we received from residents living in the private sector increased at a far higher rate than we had expected."

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