PEOPLE could be pushed into poverty because of Government welfare reforms, Cherwell District Council has warned.

The Conservative-controlled authority sounded the warning over cuts to housing and council tax benefit and an overall cap on all benefits.

It is now looking to put aside £150,000 to help struggling families with small grants for everyday essentials.

Housing association tenants face a housing benefit cut if their home is judged too big, while all benefits will be capped at £26,000 a year.

And the council has had its funding for council tax benefit cut by 10 per cent.

A report by a council officer says the Government wants to “ensure people are better off in work”.

It goes on: “However, our analysis shows that there is a large correlation between those households likely to be impacted by welfare reform and those impacted by the council tax reduction scheme.

“The combined effect could push more people into poverty and homelessness.”

Labour group leader Patrick Cartledge said: “The council is going to see a lot more homeless people.”

A spokesman for the Communities and Local Government department said it had given the council £203,354 to support residents.

A spokesman said: “Our reforms restore fairness to a system that had spiralled out of control.”