Actually, UKIP has not hurt Labour as much as the Tories and the LDs, but make no mistake about it, UKIP has hurt Labour as well.
---------------------
I'm sure that UKIP has taken many votes from Labour, but it appears that UKIP's rise has been a huge net boon to Labour (although Labour apparently had expected to gain even more seats, presumably because it thought that UKIP would take more votes from the Tories and fewer from Labour):
"At 2pm on Friday, with around half of the results declared, Nigel Farage’s party had gained more than 100 seats.
The Conservatives had lost 133 council seats and lost control of nine councils. The losses included Basildon and Castle Point in Essex, where Ukip made gains.
The Tories also lost Hammersmith & Fulham and Croydon in London, and Amber Valley in Derbyshire to Labour.
Labour had gained almost 170 seats and control of five councils, a performance that fell short of the party’s hopes. Ed Balls, the Shadow Chancellor, said the results were “not good enough”.
The Liberal Democrats have also suffered heavily losses across the country, despite winning in Eastleigh in Hampshire.
Nick Clegg's party lost control of Kingston in London to the Conservatives. The council was seen as a key target for the Lib Dems and its loss will put Mr Clegg, the Deputy Prime Minister, under severe pressure."
http://www.telegraph.co.uk/news/politics/local-elections/10851024/Ukip-earthquake-rocks-Labour-and-Tories-in-Elections-2014.html