February 2020 – Rising Cost of Homelessness

Figures compiled by the LGA show that 69.3 per cent (226) of councils responsible for housing in England (326) overspent their homelessness budgets, spending almost a third more (£140 million) than the £502 million they budgeted for in 2018/2019.

Councils reported a range of pressures affecting their budgets, including that

Rising demand is being driven by a severe shortage of affordable social housing

Gaps between rents and housing benefits are leaving private rented housing too unaffordable for low-income families and

There was little choice but to house homeless families in temporary accommodation including expensive bed and breakfasts

The LGA reports that council spending in England on placing families in B&Bs rose by more than a fifth in the last year alone, from £93.3 million in 2017/2018 to £114.9 million in 2018/2019, and that 7,110 homeless households are currently in bed and breakfast accommodation, a 15 year high.  There is no one single reason for this – some contributing factors go way back to the scrapping of rent controls in order to stimulate private sector provisions while introducing Housing Benefit controls to limit the amount available to meet inflated rents through welfare support. The effect of this was made even sharper when Local Housing Allowance rates were frozen in 2016. This has been exacerbated by the Right to Buy scheme and the failure to replace lost social housing stock and more recently local authorities seeking to respond to the additional duties placed on them by the Homelessness Reduction Act.

As a result, the LGA urges the government to use Budget 2020 to provide councils with sustainable, long-term funding to prevent homelessness, give them the powers and funding to increase council house building, and restore local housing allowance to cover at least the lowest third of market rents.

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