SOUTHAMPTON City Council paid out £514,000 last year to help people struggling with housing costs because of welfare reforms.

A leading think tank has warned more action will be needed to help struggling renters, as hundreds of thousands fewer people are employed across the country since the start of the coronavirus pandemic.

Department for Work and Pensions figures show Southampton City Council paid £657,800 in Discretionary Housing Payments to claimants in the year to March.

Of that, £514,500 went to helping people who were in difficulties because of reforms in the welfare system.

Eastleigh council paid £160,200 in Discretionary Housing Payments,Winchester City Council paid £158,300 and Fareham £111,000.

Elsewhere, New Forest paid £263,000 and Test Valley paid £160,000.

The payments are given to people who qualify for Housing Benefit or the housing element of Universal Credit, and who are struggling with housing costs.

The Government sets DHP funding for local authorities each year, with councils having to dip into their own funds if demand exceeds their allocation.

Councils across England and Wales paid out £132 million in 2019-20 – but 24 authorities did not supply figures, meaning the total could be higher.

More than 40% of councils had to spend more than the amount they got from the Government.

Last year, Southampton City Council spent 98% of its government allocation.

In May, the Government announced funding for councils across the two countries would increase by £40 million in 2020-21, to £179.5 million, citing “affordability pressures” in the rental market.

Southampton City Council is set to receive £822,000, an increase of 22% on last year.

Eastleigh will get £245,000, Test Valley £206,000, Winchester £173,000, New Forest £368,000 and Fareham £154,000.

Karl Handscomb, senior economist at the Resolution Foundation think tank, said: “The current crisis has pushed three-quarters of a million employees out of work, increased the number of households impacted by the benefit cap, and seen more private renters falling into arrears. All of these factors will have in turn increased demand for Discretionary Housing Payments.

“The increased demand is likely to remain elevated while the crisis is still with us, highlighting both the need for the welcome additional housing support announced in March, and for more action to support renters struggling to pay for their homes.”