The LGA has called for an overhaul of a hardship fund after research claimed that the majority of people losing income as a result of welfare reforms will be unable to move house or find work.
The Centre for Economic and Social Inclusion study, which was commissioned by the LGA, estimated that only 115,000 claimants were in a position to move house and a further 155,000 would be able to move into work.
The combined 270,000 claimants represented 23% of the 1.18 million people affected, the report said.
The LGA says the figures highlighted the need to re-assess the distribution of £115m in discretionary housing payment (DHP) money, which councils are using to support residents who are struggling because of the welfare reforms.
A spokesman for the sector body said the government should “immediately re-evaluate the DHP fund to ensure supply better matches demand in local areas”.
He also called for councils to be given a bigger role in getting residents into employment, and for the cap on councils’ borrowing for house-building to be lifted.
The CESI report also estimated that 59% of all welfare reform reductions fell on households where somebody works. It said that, excluding the impact of Universal Credit, the income of households claiming benefit would be on average lower by £1,615 a year – or £31 a week – in 2015/16 as a result of welfare reforms.