THOUSANDS of North-East families have been given emergency help after being hit by the so-called ‘bedroom tax’, in fresh evidence that the region has been hit the hardest.

Town halls shelled out almost £6.5m in ‘discretionary housing payments’ (DHP), the vast majority to ease the pain of soaring rents because of housing benefit cuts.

Durham County Council alone paid out almost £1m in just 12 months - of which 85 per cent was because of the bedroom tax, helping 1,681 households.

And every North-East council dipped into its own resources after running out of Government-funded DHPs, albeit with small amounts in some cases.

In stark contrast, local authorities in North Yorkshire – and elsewhere - paid back significant sums to Whitehall, after failing to spend it in 2013-14.

That prompted Lord Freud, the welfare reform minister, to say “Recent scare stories about councils running out of money were grossly exaggerated”.

But the figures show that is exactly what happened in the North-East, where every town hall exhausted its DHPs – and spent more to meet demand.

Hartlepool (a £115,239 top-up), Middlesbrough (£37,420), Sunderland (£22,911) and Gateshead (£89,241) were among councils busting their budgets.

Helen Goodman, the Bishop Auckland MP, said: “These figures show the desperate problems caused by the bedroom tax.

“The councils can help only those in the greatest need. This Tory-led Government is putting the burden of the fixing the finances on the poorest communities while millionaires get tax cuts.”

The removal of the "spare room subsidy" cut housing benefit by 14 per cent for one extra bedroom and 25 per cent where there are two.

Ministers argued that forcing ‘under-occupying’ households to move will free up larger homes for families living in cramped conditions, as well as save £465m.

But previous figures revealed that very few tenants have moved to a smaller home – backing up protests that those smaller homes are not available.

A Durham County Council spokesperson said it met all applications for DHPs in 2013-14, although some late bids would come from its 2014-15 allocation.

He added: “Demand has continued to rise at a steady rate and the council is currently working on forecasts to understand future demand.”

But Lord Freud said 240 out of 380 local authorities across the country had underspent their DHP funding - one in ten councils spending less than 60 per cent.

He added: “We tripled support for vulnerable people to £180m last year. It is good to see that people have benefited from that support as they adapt to the changes.

“Our vital reforms are fixing the broken welfare system by restoring fairness for hardworking people and making sure work always pays, as part of our long-term plan.”