London boroughs fear the consequences of the homelessness emergency

Comment24.10.24by Grace Williams

The cost of temporary accommodation is breaking councils’ budgets, writes Grace Williams, executive member for housing and regeneration at London Councils

Grace Williams

Cllr Grace Williams is London Councils’ executive member for Housing & Regeneration

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London boroughs fear the consequences of the homelessness emergency #UKhousing

The cost of temporary accommodation is breaking councils’ budgets, writes Grace Williams at London Councils #UKhousing

Homelessness is causing misery and upheaval across the country – and London is the epicentre of the crisis.

In our new report on London’s homelessness emergency, London Councils reveals that 183,000 residents of the capital are currently homeless and living in temporary accommodation. This is the highest figure on record.

The capital accounts for 56% of England’s total number of households in temporary accommodation. As the situation in London worsens, the impact is increasingly felt beyond its boundaries. It is clearer than ever that we need renewed action at a national policy level to reverse this unacceptable situation.

Homelessness is an injustice. Everyone should have a permanent home. Secure and stable housing is fundamental for accessing opportunity and maintaining well-being.

What does this mean for London’s next generation? There is stark evidence of dramatically worse outcomes for homeless individuals in health, education and employment. I genuinely fear the consequences – both short and long term – for the tens of thousands of children caught up in the homelessness emergency.

“London boroughs collectively spend £114m a month – or £4m every day – on temporary accommodation. Our spending on temporary accommodation has jumped 68% in just one year”

Too often the only available accommodation for homeless families is far from suitable. Our report shows a dramatic spike in the number of homeless London families placed in B&Bs with shared facilities. We’ve also seen an increase in the number of homelessness placements London boroughs make to areas outside the capital.

Boroughs do not want to resort to these measures. We do our best to support homeless residents and to find them suitable accommodation close to their community. But the chronic shortage of affordable housing in London means that we are increasingly forced into the ‘least-worst’ options just to keep a roof over homeless Londoners’ heads.

As our analysis also reveals that the homelessness emergency brings utterly unsustainable costs to public services. London boroughs collectively spend £114m a month – or £4m every day – on temporary accommodation. Our spending on temporary accommodation has jumped 68% in just one year.

It is no exaggeration to say that these levels of expenditure threaten to break boroughs’ budgets. At least seven London boroughs already indicated they may need exceptional financial support next year. For many boroughs, the cost of London’s homelessness crisis is the key driver of their financial instability, with boroughs collectively expecting to overspend by around £250m on homelessness services this year.

If things continue as they are, homelessness pressures may well tip boroughs into effective bankruptcy – and force the government into even more costly interventions.

Boroughs are working hard to address the crisis with the limited tools we have. We are trying to secure better value for money by collaborating on the temporary accommodation rates we pay, and rooting out poor temporary accommodation through our ‘Setting the Standard’ programme. We have created the Housing Development Academy to upskill our development teams and drive forward affordable housing supply.

“We are pushing for an urgent uplift to the Homelessness Prevention Grant to sustain local services – a ‘spend to save’ investment that would allow us to help more people stay in secure, long-term accommodation in the first place”

But the pressures are enormous and our local resources vastly overstretched. We require national solutions.

As we approach next week’s Budget, we’ll be looking for more support to tackle homelessness. The promise of a new, cross-departmental strategy on homelessness – developed in partnership with local authorities – has the potential to make an immense difference.

But there’s no getting away from the fact that funding is crucial. We are pushing for an urgent uplift to the Homelessness Prevention Grant to sustain local services – a ‘spend to save’ investment that would allow us to help more people stay in secure, long-term accommodation in the first place.

We are also calling for the increase to Local Housing Allowance (LHA) to become a permanent measure, tracked annually to market rents so that low-income private renters receive the support they need.

Alongside this, boroughs are urging the government to remove the January 2011 cap on LHA payable for temporary accommodation in housing benefit subsidy. This is the amount of money councils can claim from the government for their temporary accommodation costs, and freezing the subsidy at 2011 rates has left councils with an enormous cost burden. As we increasingly rely on high-cost accommodation options, such as B&Bs and commercial hotels, this is a major issue for London boroughs.

And, of course, more investment in affordable housing is key to building the new homes at the scale we so desperately need.

As distressing as the situation is, we must remember that homelessness is not inevitable. London boroughs remain determined to support our homeless residents and to work with national government to bring this emergency to an end – for the benefit of all our communities.