Costs of councils providing housing for homeless people soar

Britain's housing crisis has reached boiling point. Rents soar leaving millions of people vulnerable to Number“No-fault evictions and homelessnessbecause the landlord evicted the tenant to take advantage of higher market value. Instead of providing stability, our housing system has become a source of hardship for many people.The most severe of these are 310,000 homeless families, including more than 140,000 childrenare often trapped in unsuitable temporary accommodation (TA) while waiting for permanent housing.

These intermediate houses often lack adequate facilities and pose safety risks: Three quarters of people live in poor conditions and one in five face dangers such as wiring faults and fires. The most shocking thing is, 55 children died at least in part from Since 2019, their teaching assistant conditions have been improving. More than two-thirds of children do not have adequate access to basic facilities such as cooking or laundry, while more than one-third do not have their own bed to sleep in.

The instability and unsuitability of temporary accommodation will only exacerbate the difficulties already faced by homeless families and children, particularly those who are more vulnerable For example, survivors of domestic violence.

But as well as this human crisis, the situation is also placing severe pressure on the finances of local authorities across England. Councils face growing financial challenges and a surge in homelessness, which they have a legal obligation to address.and Six local authorities have gone bankrupt since 2021, with one in 10 expected to join next year, councils are under pressure to make a choice and are short of funds.Recently, the government proposed a An additional £600 million was added at the last minute Designed to prevent further parliamentary insolvency.However, this expedient is not enough to block the expected £4 billion funding gap.

fundamental problem

The root cause of this financial stress is twofold. First, rising rents, combined with the freeze on Local Housing Allowance (LHA) TA subsidies between 2011 and 2024, have left councils facing a growing gap between housing costs and government support. in London, LHA gives subsidies Currently only 69% of TA's total expenses are covered.

Secondly, the chronic lack of available social housing has forced councils to increasingly rely on more expensive forms of technical assistance, particularly private rented sector (PRS) lettings, bed and breakfasts and hotels. This reliance on expensive PRS placements is a driving factor in the surge in TA spending across England, From £1.4 billion in 2018/19 to £1.8 billion in 2022/23. The London boroughs have been hardest hit, with TA spending in London reaching £1 billion a year, accounting for 60% of national spending, despite London's population accounting for only 16% of the UK's population. Meanwhile, TA costs for London councils have risen by 30% in the past five years.

There has also been a sharp rise in the use of expensive night-pay homes, which are used as a last resort by councils. Nightly paid accommodation is an independent housing unit rented from a landlord on a nightly basis and managed by a private agency or individual.Net expenditure on this by councils across England almost doubled From £55m in 2021 to £107m in 2022, a further £50m was added last year. At NEF, we submitted a Freedom of Information (FOI) request which revealed that a third of responding councils had more than doubled their total spend on nightly paid TA between 2018-19 and 2022-23 .

Reliance on this inadequate and expensive form of accommodation is rapidly increasing among London councils in particular. Croydon have spent a net £53m on night-paid assistants alone over the past five years.At the same time, the Council cutDedicate £200m from vital services such as social care and education and increase council tax by 15% to balance the books after bankruptcy 2022.

The use of nightly paid teaching assistants adds to the council's financial instability while confining families to often poor quality accommodation, including what tenants describe as converted office space Number“uninhabitable”. Local authorities are forced to divert large amounts of funding to often substandard technical assistance, straining budgets and compromising their ability to adequately fund other vital services.

Figure 1: The cost of homelessness in London councils has increased by 30% since 2018/19

While the crisis is being felt most acutely in London, it is not limited to the capital. Our Freedom of Information investigation found that this spending appears set to continue to increase. For example, Southampton City Council's total nighttime spend in 2018/2019 was £23,000, which has soared to £700,000 in the first three quarters of this financial year alone, an increase of more than 30 times. Smaller councils face even more staggering price rises, with Rother spending rising from just under £6,000 in 2018/19 to a staggering £342,000 in the first half of 2023/24; Over the past five years, night-pay TA's Total spending surged 8,000%.

Further examples include Manchester City Council, which spent a total of £19.5m on evening paid teaching assistants last year. Just halfway through the current financial year, they have already spent more than £22 million, meaning they are likely to spend double that in one financial year. Meanwhile, Solihull has spent six times more – jumping from £41,000 to £250,000 – in just over half the financial year compared to 2021.

figure 2: Teaching assistant expenses per paid term have risen to nearly one-third of total costs

How did we get into this mess?

this The proportion of UK households owning social housing has halved since 1980restrict access 1.2 million households are in trouble people on the waiting list and 310,000 homeless families. With housing stock depleted by decades of forced sales and financial constraints preventing replacement housing from being built, councils have no choice but to use market options to address rising homelessness.

We need immediate solutions. rather than breaking promises to tenants, this administration should repeal no-fault evictions and related policies that exacerbate housing insecurity. At a minimum, this Government must ensure that the LHA TA subsidy, which has been frozen since 2011, is increased in order to develop a sustainable solution for Parliament moving forward.

The Council also needs to secure grant funding and the tools required Buy new social housing Addressing the challenge of growing homelessness. The government should encourage councils to buy houses to rent out for social rent or as TA – As the Greater London Authority does – Allowing them to act quickly to better target supply against demand.Our research at NEF shows that over the next two decades, London’s takeover program will £1.5bn to save parliament Reduce technical assistance costs and save central government £780 million.

Fundamentally, we urgently need a new generation of social housing to address the housing emergency and deliver safe, secure, affordable housing.In England, the number of social rented homes sold through the Right to Buy scheme exceeds the number built in 2022/23 and is close to 11,000 compared to sales 9,500 Completed.As well as tackling the homelessness crisis, building 90,000 social homes each year will generate Annual economic activity reaches £12 billion, The cost will be recovered after 11 years.

This complex set of problems requires systemic, long-term solutions to the monumental challenges that are causing human suffering and pushing parliaments to the brink of collapse. Councils and housing associations must be provided with the funding and tools to deliver the affordable, safe, high-quality homes we urgently need. With ambitious, common-sense policies that focus on sustainable solutions, we can lift millions of people out of housing need. But fast, ambitious action is needed before the human and economic costs of homelessness spiral further out of control.

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