New blow to council tax

Council tax payers are facing a £120 million bill after a court ruling which could let up to 40,000 refugees seek housing in London.

The move could put almost £44 on the average council tax bill and send waiting lists for council housing soaring.

The increase in the boroughs most affected could be even higher - and does not include the extra cost of education and other services used by refugees.

Today council leaders from across London called for Government to step in to avert a crisis.

They stressed there was no anti-refugee agenda in their concerns, saying they were only worried about sudden increases in the bill for emergency housing and other services.

Official figures show refugees make a net contribution to the London economy. David Blunkett pledged today that legal migrants from eastern Europe will be welcomed to seek work in Britain as soon as the EU expands in May, to help fill a shortage of unskilled labour in London and the South-East.

Law lords ruled last week on test cases involving Iraqi Ammar al-Ameri, who has a wife and two children, and Maria Osmani, an Afghani with two sons.

They were sent to Glasgow under the Government's dispersal scheme but the law lords ruled that they were entitled to seek emergency housing anywhere in the country - overturning a normal ban on them returning to London. The ruling opens the way for up to 40,000 people who have won the right to stay in Britain to come to London. Nobody knows how many of the 40,000 will actually come to the capital.

But Audit Commission figures show that at the last survey up to 85 per cent of all asylum seekers and refugees in the UK either live in London or would like to live in the capital.

The Home Office said it expected "very few" people to move, but Kensington and Chelsea council said it feared virtually everybody who has gained entitlement would come to London.

When they arrive they will be technically destitute - and able to receive emergency housing accommodation paid for by councils.

Local authorities estimate the average cost of each case to councils will be £3,000 a year - putting the total bill at up to £120 million.

An Evening Standard analysis revealed some councils could face bills approaching - and in one case topping - £10 million each year. The analysis uses 1999 Audit Commission figures which show the proportion of asylum seekers who went to each borough before the dispersal system was introduced, and calculates the potential bill to each authority if the 40,000 former asylum seekers were to return to London in full.

A series of inner London boroughs are now drawing up plans for dealing with the potential influx.

A spokeswoman for the Association of London Government, which represents all the city's boroughs, said: "We are considering the full implications of this ruling."

Islington council could be one of the worst hit.

Council leader Steve Hitchins told the Evening Standard he and other borough leaders would ask for government help if they faced large bills.

"If these people - who have been recognised as genuinely needing asylum in Britain - do come, we would look to central government," he said.

Merrick Cockell, leader of Kensington and Chelsea council, said: "It is not a case of Government throwing more money at us. They must amend law to reverse this ruling so that the rights of refugees are balanced by the ability of communities to cope with an influx of people when there is already insufficient housing."

At the height of the crisis, before dispersal was introduced, Westminster City Council was putting up 1,500 asylum-seeking households in council accommodation, private flats or bed and breakfasts.

Because of dispersal, that total now stands at just 40, but the council fears many of the former asylum seekers who were sent elsewhere could now return to the borough.

The case which ended in the landmark ruling was brought against Harrow and Kensington and Chelsea councils.

Harrow Council is anticipating a "considerable" burden on its budget.

It already faces dealing with 2,000 emergency applications for housing each year, and at any one time has 1,600 families in temporary accommodation. It already spends £6 million on the homeless every year.

Council leader Archie Foulds said the judgment "is likely to seriously add to the existing burden of homelessness in London".

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