THE true cost of austerity measures imposed by the UK Government has been calculated for Edinburgh ­— and it shows that less well off people in the capital face losing hundreds of millions in so-called welfare payments.

A new report on welfare reform going to the city council today shows that, after the announcements in the summer Budget of Chancellor George Osborne, the recipients of welfare payments in Edinburgh will be a total of £270 million worse off over the next five years.

The corporate policy and strategy committee will be given an update on the welfare-reform measures showing that in the space of 20 months, the value of the austerity cuts as it affects the capital has soared from a total of £223m to £270m over five years. Some 64 per cent of the cuts in payments to Edinburgh residents will be achieved through cuts in working-age benefits, tax credits and Universal Credit, the latter being introduced in Edinburgh earlier this year.

The report was produced before the House of Lords’ decision on tax credits last week. But council sources say that they anticipate the cuts going ahead anyway.

According to the report by the council’s business intelligence officer, the UK government’s freeze on working-age benefits, tax credits and local housing allowances will mean a cut of £81.9m of payments in Edinburgh.

Reducing income thresholds in tax credits and work allowances in Universal Credit is projected to save a total of £90.1m of payments to claimants in Edinburgh.

A further five measures account for total estimated welfare cuts of almost £86m in Edinburgh over the period, says the report.

These include measures to reduce the overall benefits cap for households, limit the child element to two children in new tax-credit claims, remove the family element in tax-credit claims, increase the tax-credit taper rate, and additional payments associated with the employment and support allowance work-related activity.

The report says that the estimates are based on available data on the number of Edinburgh-based benefits claimants in each group affected by policy measures announced in the summer Budget.

It says: “Overall, the analysis estimates that of total UK welfare payment cuts of £46.5 billion … the total value of cuts to recipients based in the city of Edinburgh is estimated at some £270m, or 0.6 per cent of the UK total.

“These cuts are expected to phase in over time, rising from some £28m in 2016-17 to £77m in 2020-21.

“No data is published on the actual value of current benefits and tax-credit payments to recipients in Edinburgh, but based on available data on the number of benefits recipients in the city it is estimated that these cuts are made from current benefits payments of some £1.6bn per annum.”

Committee convener Councillor Ricky Henderson said that the new report shows that the scale of cuts to benefit payments in Edinburgh had taken a big step up in the past two years, and especially since the Conservative government took office in May.

Henderson said: “This is the first report we have had since the Budget, and for the first time people can see the total amount of money that is coming out of people’s pockets.

“These are the people in the city who are the least well off, and they are being asked to pay some £270m worth of pain over five years. It is a huge sum but the human cost is the real issue.

“If you are finding it tough to pay for things, then the last thing you need is £50 or £60 coming out of your income.

“That is my main concern ­— the hurt that is being done to people by these cuts.

“But it is worth pointing out that this is £270m that is not going to go into the Edinburgh economy, as the evidence shows that people who are less well off tend to spend their money locally.”