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Better data can improve councils’ responses to pressures on temporary accommodation
A lack of reliable information on costs makes it challenging to understand the value for money of local authority spending on temporary accommodation, writes Dr Lígia Teixeira, chief executive of the Centre for Homelessness Impact
In the UK we have some of the strongest legal protections against homelessness in the world. A prime example is the duty on local authorities to provide temporary housing for families or other people deemed to be in priority need who otherwise risk homelessness.
Indeed, in Scotland the concept of restricting this only to priority groups has been removed and the entitlement is universal to anyone who experiences or is at risk of homelessness.
It is very clear, however, that the provision of temporary accommodation is not working as intended. Families in some local areas, especially in some London boroughs, can stay in such housing for five years or longer while they remain on waiting lists for social housing. The poor conditions of too much housing stock used for temporary accommodation has provoked growing protest. And the sheer numbers of people staying in temporary accommodation appear unsustainable.
That number has more than doubled in England since 2010, and has risen significantly in Northern Ireland, Wales and, to a lesser degree, Scotland.
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This surge not only strains the individuals affected, but it also places significant financial pressure on local authorities. However, amid this daunting reality, a critical gap exists in our understanding – the lack of high-quality comprehensive data on the costs associated with temporary accommodation. Without a clear grasp of the financial data, how can we hope to understand whether these resources could be better used to achieve more effective outcomes?
At the Centre for Homelessness Impact, we are committed to driving change through better use of data and evidence. In 2023, we launched a programme of work focused on maximising the value for money of investments in homelessness, beginning with temporary accommodation.
“The financial scale has been under-reported and that total spending on temporary accommodation by local authorities in England is £2.42bn, not the figure of £2.29bn reported for 2023-24”
We chose this because it is the biggest single item in local authority homelessness budgets. Temporary accommodation now accounts for three-quarters of local authorities’ gross spending on homelessness.
Our latest output from this value for money programme is a report that analyses local authority spending on temporary accommodation. It finds that the financial scale has been under-reported and that total spending on temporary accommodation by local authorities in England is £2.42bn, not the figure of £2.29bn reported for 2023-24.
This discrepancy arises both because councils sometimes use their own housing stock for this purpose but this isn’t captured in official data, and because of inconsistencies in how local authorities record and report their spending. These inconsistencies often stem from the varying quality of financial data available to councils, which makes it challenging for them to track and report spending accurately internally.
The report also highlights a misalignment between central and local government, which can create unintended consequences and hinder value for money. This arises because some forms of temporary accommodation are more expensive to national government (such as some types of hostels) and others more expensive to local councils (notably using bed and breakfast accommodation for families).
The trend over time has been of a significant shift in the financial burden from central to local government, with the proportion of spending on temporary accommodation financed from councils’ own budgets rather than the benefits system rising by 80% over five years, from £479m in 2018-19 to £1.06bn in 2023-24. Councils’ net spending on temporary accommodation rose by 54% last year alone.
A key finding is that much of the data on temporary accommodation costs reported by councils to central government is inconsistent or of poor quality or, in some cases, absent altogether. This lack of reliable information on costs makes it challenging to understand the value for money of local authority spending on temporary accommodation in comparison to other forms of homelessness spending, such as on prevention programmes.
“Underpinning the enormous rises in the number of people placed in temporary accommodation and the substantial extension in the duration of their stays have been structural drivers in the benefits system and housing supply that require long-term solutions”
We recommend that the government does even more to support councils to collect and report high-quality, accurate data on their spending on temporary accommodation. Local authorities should, in turn, focus on strengthening their financial data infrastructure, using it as a tool to drive better outcomes and maximise value for money.
Underpinning the enormous rises in the number of people placed in temporary accommodation and the substantial extension in the duration of their stays have been structural drivers in the benefits system and housing supply that require long-term solutions.
In the meantime, however, our analysis shows that there are immediate steps that both central and local government can and should take to improve the quality of their data on spending on temporary accommodation. Doing so can enhance value for money, make current resources go further, and, most importantly, improve the lives of the many families enduring prolonged stays in what should be temporary housing.
Dr Lígia Teixeira, chief executive, Centre for Homelessness Impact
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