Urgent need for social housing, as cost of homelessness pushes councils into the red, warn town hall chiefs

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COUNCILS are sinking under the weight of demand for their homelessness services, according to town hall chiefs, with over two-thirds pushed into the red.

The warning from the Local Government Association (LGA), which represents councils in England, comes a day after housing secretary Robert Jenrick MP announced an extra £122 million for councils to tackle homelessness.

But rising levels of demand for homelessness services, and the increasing cost of using expensive B&B accommodation to place families is pushing services to breaking point.

According to the LGA, nearly seven in 10 council homelessness services are having to spend more than they planned on homelessness support.

The organisation’s analysis claims that 69.3% (226) of councils responsible for housing in England (326) overspent their homelessness budgets. Councils planned to spend a total of £502.7 million in 2018/19. Yet they ended up overspending by a combined total of £140 million – almost a third more than they had budgeted for.

Furthermore, rising homelessness pressures have also led to:

  • Temporary accommodation placements by councils having had to rise by almost 80% since December 2010
  • An increase of more than 200% in bed and breakfast accommodation being used over the same period
  • Councils having to house more than 86,000 households in temporary accommodation, including over 127,000 children

The rising demand is driven by a “severe shortage” of genuinely affordable housing, compounded by huge gaps between rents and housing benefits because of Government welfare policies. These leave swathes of housing too unaffordable for low-income families.

The LGA says this is leaving councils with no choice but to place more and more families in temporary accommodation including bed and breakfasts.

“Homelessness is a tragedy for every individual who experiences it and one of the most pressing issues facing councils and the Government,” said Councillor David Renard, the LGA’s housing spokesperson.

“To reverse rising levels of homelessness, which represents huge human consequences and financial costs, the Government needs to invest in homelessness prevention.

“Councils want to work with Government to be able to prevent homelessness before it happens, but as a result of unprecedented funding pressures, they are becoming increasingly limited in what they can do.”

Latest figures show that council spending in England on placing families in bed and breakfasts rose by more than a fifth in the last year alone, from £93.3 million in 2017/18 to £114.9 million in 2018/19.

There are 7,110 homeless households currently in bed and breakfast accommodation – a 15-year high, the LGA said.

Faced with this, the LGA is urging the Government to use the coming Budget to provide councils with sustainable, long-term funding to prevent homelessness in the first place. As part of this, it wants to see councils given the powers and funding to usher in a “genuine renaissance” in council house-building to provide the social homes for rent that it says are desperately needed to help boost affordability, home ownership and reduce homelessness.

For this to happen, councils need to be able to keep 100% of Right to Buy receipts to reinvest in new homes, and to be able to set Right to Buy discounts locally.

It is also calling on the Government to adapt welfare reforms to protect families at risk of becoming homeless, by restoring local housing allowance rates to cover at least the lowest third of market rents.

“We desperately need to be able to build more social housing to reduce the number of families being placed in temporary accommodation and bed and breakfasts,” Renard added. “With adequate funding and powers, councils can boost efforts to prevent homelessness and get back to building the affordable homes the country needs.”

Responding to the LGA’s analysis, Labour’s shadow housing secretary, John Healey MP, said: “The rising homelessness visible in every town and city in our country shames the Conservatives.

“High homelessness is a direct result of Conservative decisions since 2010, to cut funding for vital services and refuse to enforce basic standards for renters facing eviction.

“Labour is challenging Ministers to back our plan to end rough sleeping and tackle the root causes of rising homelessness, starting with making 8,000 homes available for those with a history of rough sleeping.”



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