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Reset Homelessness: ‘The system cannot continue as it is’
Inside Housing and Homeless Link’s new campaign, Reset Homelessness, calls for a systemic review of homelessness funding in England. But how has spending on the homelessness crisis gone so wrong? Jess McCabe reports
“Why are we spending a huge amount of money on homelessness and yet not seeing any reduction in homelessness? And, in fact, seeing the opposite, seeing increased people becoming at risk of homelessness, increased numbers in the system, and increased numbers not being able to access help on our streets?”
This is the question that Homeless Link is posing to the government, explains Sophie Boobis, head of policy and research at the charity, which is a membership organisation for homelessness service providers.
Some answers can be found in Homeless Link’s new report, Breaking the cycle: Delivering a homelessness funding system that works for all. The charity hopes this report will persuade the government to respond with a rethink on how services meant to prevent and address homelessness are funded. And it is in large part the reason for the new Reset Homelessness campaign that Inside Housing is launching today with Homeless Link.
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In the lead-up to the Labour government’s first Spending Review in spring, we are calling for a systemic review of homelessness funding in England. Inside Housing, as part of this, will be reporting on the funding crisis, and how it is impacting service providers and the homeless people they work with. We will also be submitting work from this campaign to our existing Plan for Housing campaign with the National Housing Federation, which is seeking views on what should be in the government’s long-term housing strategy.
Lack of spending clarity
To begin this work, we are digging further into Homeless Link’s report, which for the first time attempts to tell the full story of what has gone wrong.
One of Homeless Link’s most worrying findings is that no one in government can pinpoint exactly how much public money is being spent in total on homelessness. We do know the sums are vast – yet, Homeless Link contends, the funding isn’t being spent sensibly, and it is delivering poor results.
In 2023, there were 907 accommodation projects for single homeless people in England, according to Homeless Link’s new annual survey data. This is a 40% reduction compared to 2008.
Much of the sector is now dependent on a combination of short-term grants, fundraising and housing benefit. This scramble from contract to contract, and grant to grant, is taking away resources and focus from the job of supporting homeless people. “The picture is one of a traumatised system, so deeply impacted by cuts and shortfalls that it is unable to meet its purpose in ending homelessness,” the report says.
There are 32,466 bedspaces for single homeless people in England – a 2% drop on 2022, but a 45% drop on 2008.
These cuts are happening even though the number of people experiencing homelessness has been rising, and the temporary accommodation crisis has been contributing to a financial disaster for local authorities. But the numbers of homeless people who don’t qualify for ‘statutory housing’ support – meaning they aren’t vulnerable enough to be deemed in priority need – have been rising, too.
“It came to a head coming out of the pandemic into a cost of living crisis, and seeing how vulnerable and exposed the homelessness sector was to the increase in costs,” Ms Boobis explains. “We’ve hit the end of the road in terms of where the sector can pick up the pieces of underfunding. I don’t think it necessarily needs more money being spent. At the moment, we’re spending a lot of money, very ineffectively. We also don’t know how much we’re spending.”
All of this has led to Homeless Link’s ask for a reset of homelessness funding. As its report concludes: “Radical changes to sector funding have taken place before, and they have delivered cost-effective services that have changed the lives of thousands. Without reform, the system will be pushed past breaking point.”
Services are getting worse
Homeless Link’s latest survey of members found that 19% of providers have already reduced or closed services, and 47% are at further risk of doing so.
A big source of funding for services has been the Rough Sleeping Initiative from central government – but until recently this was only agreed on a year-by-year basis. The last government responded by setting in place a three-year cycle, which is due to end in 2025.
“As the end of the funding period draws closer, members report feeling they are again on a funding cliff edge with no certainty about their future viability,” the report finds.
Many services are dependent on supplementing this with short-term funds from trusts and charities. “This can have serious impacts on the continuity of care, with staff moving between temporary contracts and changing roles to match whatever funding is available,” the report says.
All this is leading to high levels of turnover among staff who deliver the services, and low wages. And it is having a knock-on effect on homeless people who rely on these services, according to Homeless Link’s research. If they are able to access support at all, then the quality is affected, and in some cases can be “actively damaging”.
The funding black hole
There is currently no reliable data on how much is spent in total on homelessness services. This is because of the growing role of exempt accommodation in providing a level of supported accommodation to homeless people who don’t qualify for housing through their local authority, so aren’t being placed in temporary accommodation.
Exempt accommodation is shared housing, which is meant to provide an element of care and support, making it eligible for “enhanced housing benefit”.
Many Homeless Link members rely on enhanced housing benefit to keep going: 56% say this is their primary source of funding. Yet the money is focused on maintenance of the building, not on support. Homeless Link says this has “left numerous providers to describe their own services as ‘inadequate’”. Meanwhile, the report says: “In recent years... an increasing number of bad actors have stepped into the sector to take advantage of the exempt accommodation loophole and the low level of scrutiny placed on providers.”
In 2021, Inside Housing reported that the number of exempt accommodation claimants in Birmingham alone had risen from 3,679 in 2014 to more than 22,000. Concerns about the quality of this provision led the last government to pass the Supported Housing (Regulatory Oversight) Act 2023, which the new government is expected to implement.
In 2022, the Housing, Communities and Local Government Select Committee of MPs attempted to pin a number down. It found the money spent on exempt accommodation was “not readily available and to provide it would incur disproportionate cost”.
Homeless Link’s report adds: “DWP [the Department for Work and Pensions] are not able to provide a figure of what is being spent at current, nor estimate what proportion of that money is spent on homelessness-specific exempt accommodation, nor of which is on poor-quality provisions.”
The report concludes: “While it is not clear how much money is currently spent on exempt accommodation, the system is clearly generating huge inefficiency and waste. The new government can regain strategic oversight of spending by quantifying the existing housing benefit spend and redistributing funds to deliver better investment, higher-quality services and improved outcomes for those who live in them.”
Accommodation providers’ main source of funding, 2010-24
How did we get here?
If you jumped in a time machine to 1997, the picture facing the new Labour government would be startlingly familiar, according to Homeless Link’s report.
Rough sleeping was high. Most services were funded through housing benefit – and it was unclear how much was being spent. Benefits could only cover the cost of accommodation, so services had to access a patchwork of different funding streams to cover the costs of providing support. By 1999, the Blair government had set up a Rough Sleepers Unit and set about reviewing funding for homelessness.
Out of this exercise came the Supporting People programme in 2004 – a £1.8bn ringfenced pot of money given to local authorities, which had to be spent on housing-based support programmes. This replaced housing benefit, and all the other streams of funding, with one pot of money. Quality standards were also introduced, to oversee the support delivered.
By 2009, the budget was £1.61bn a year – but the Audit Commission calculated that the benefits of the programme amounted to £3.41bn. This same year, the ringfence was removed – with the intention of making sure the money was being efficiently spent.
In 2010, as the fall-out of the subprime crisis continued, the Conservative-Liberal Democrat coalition came to power. The next year, Supporting People was absorbed into the core local authority grant. What followed was a steep decline in local authority spending on these types of projects, amid wider budget cuts and austerity measures.
WPI Economics calculated that spending on homelessness fell 27% by 2017-18. For ‘single’ homeless people (those without dependent children, who are less likely to be deemed in priority need and owed a homeless duty), the cut was 50%.
As rates of homelessness rose and in response to specific crises, such as the pandemic and the war in Ukraine, the government intervened with a patchwork of different funding pots. There has been the Rough Sleeping Initiative, Housing First pilots, the Single Homelessness Accommodation Programme – in fact, there are so many programmes that Homeless Link’s timeline (see columns left and right) had to confine itself to just the main strands as it wasn’t possible to fit everything in.
In 2017, the Homelessness Reduction Act was passed, which was meant to introduce some support to those who aren’t ‘statutory homeless’. This also brought with it additional funding.
Yet, in an echo of the situation facing the 1997 Labour government, the vast majority of services are again provided through enhanced housing benefits. Just like then, this spending is unquantified and uncontrolled. Unlike then, a new ‘exempt accommodation’ sector of private, for-profit providers – including what Homeless Link refers to as “bad actors” – has emerged.
Timeline of homelessness funding
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