Exclusive: Warning as £50m migrant fund is scrapped

The "high risk" decision to pull the plug on the Migration Impacts Fund – which was paid for by migrants themselves through a levy on visas – could hamper efforts to stop community tensions boiling over, it was claimed last night.

Ministers were accused of cutting funding in an "ill thought-through way" after scrapping the fund, which has given about 4m to organisations in Yorkshire over the past 18 months to ease the strain on public services in areas of high immigration.

But officials branded the fund "ineffective" and said the move would save the Government 16m.

As well as funding sessions to improve migrants' English and helping them navigate education and public services, money has financed outreach workers – one of whom helped witnesses come forward and help convict a man for killing a takeaway owner.

The Tories blamed "uncontrolled immigration" under Labour for creating pressure on public services and say they are giving councils more freedom over spending to tackle issues caused by immigration. However, cuts to council, police and health budgets over the coming years will raise more questions over the strain on services.

Neither the Department for Communities and Local Government (DCLG) nor the Home Office could say what the visa levy would be used for instead.

Labour Shadow Local Government Secretary John Denham said: "The Migration Impacts Fund helped areas which saw rapid changes in population from migration.

"Every penny was funded by a levy on migrants themselves, not the taxpayer. It is high risk to take away support which could prevent the stresses of migration boiling over into real community tension."

The fund was unveiled in 2008 amid growing concern over the strain on public service budgets from high levels of immigration.

Several chief constables spoke out to claim they were struggling to deal with extra pressures from migrants, NHS chiefs found themselves burdened with extra demand as newcomers struggled to find their way around the health system and councils found demands from growing numbers of school pupils with little or no English.

Gordon Brown seized on the issue early in his premiership, pledging that newcomers would be made to pay into the fund to help local communities deal with changes in population.

Local authorities, health, police and voluntary groups in Yorkshire received 2.7m last year, funding dozens of projects including teaching 90 parents and carers in Leeds to improve their English and learn about the education system so they are better able to get involved with homework and help other new migrant families.

An outreach worker in Scunthorpe helped secure the court conviction for the killing of a takeaway owner, while in Bradford a scheme has helped get homeless migrants off the street, in Sheffield specialist family workers have engaged with children failing to attend school and West Yorkshire Police have used funding to enlist students as translators rather than having to pay fees for experts to travel from outside the area.

The extra levy was initially expected to raise 70m over two years, but official figures suggest it was set to be closer to 50m in the end.

In its election manifesto, Labour pledged to expand the scheme, but coalition Ministers have now decided to cut it from next month – meaning authorities and groups in the region will be denied 1m they had been expecting, putting many projects at risk.

One organisation to benefit from the fund was the Northern Refugee Centre which has set up advice centres for migrants across the region, helping reduce the strain on public services. A single worker in Hull helped more than 200 people in just over three months.

Chief executive Jim Steinke said: "We're very angry at something which was so obviously working well and was self-funding from the levy on migrants' visas has been cut in such an ill-thought-through way by DCLG.

"The impact will mean that we have to immediately close down the regional advice service that we were still in the process of setting up."

A DCLG spokesman said: "Ending the ineffective Migration Impacts Fund will save 16.25m this year. We believe the impacts of migration are better addressed though controlling immigration, which is why the Government will reduce the level of net migration back down to the levels of the 1990s – tens of thousands each year, not hundreds of thousands."

HOW FUND 'PAID OUT' LAST YEAR

East Riding of Yorkshire 153,644

North Lincolnshire 82,143

North Yorkshire 118,400

Wakefield 116,592

Barnsley 171,400

Rotherham 133,038

Calderdale 215,000

Sheffield 400,000

Leeds 375,000

Kirklees 225,000

Bradford 425,000

Doncaster 150,000

Hull 150,000