Council plans £20.6m extension to acquisition programme for temporary accommodation

The council considered several actions to address the issue, including working with landlords to increase the number of privately rented properties available.

However, the report said that a shortage of supply in the private sector, exacerbated by landlords asking for rent increases or for their properties back, means the council does not consider that this option would be “sufficient to meet demand and reduce reliance” on B&Bs. 

The council also considered building temporary recyclable homes on vacant council land. 

But according to the report, that option “relies on finding suitable land which would need to be provided at no cost”, while “it will take time to implement as planning permission would be required similarly to building permanent housing”. 

The report states that provision of temporary accommodation is currently the highest spending area of housing services. 

It also refers to the housing benefit subsidy rules, which mean that councils can only claim back rent equal to 90% of the 2011 Local Housing Allowance (LHA) rate for temporary accommodation.

Inside Housing recently reported that Sheffield City Council was losing millions of pounds because of the rule. 

Harrow’s report said: “This creates a funding gap that will only increase the top-up borne by the council unless new ways of funding and delivering services are put in place. 

“Acquiring our own stock will enable us to reduce costs by having greater control over setting rents at the current LHA.”

The council has submitted a funding bid of £85,000 per property to the Greater London Authority’s Council Homes Acquisition Programme for a total of £4.25m. 

If successful, the capital investment required will reduce from £20.6m to £16.3m. The council estimates that the acquisition plans will save it £289,645 in the first year, and £451,675 by year eight. 

Harrow’s programme, introduced in 2015-16, has so far led to the acquisition of 171 properties. 

Councils are under significant financial pressures because of temporary accommodation costs.

Liverpool City Council saw a 10,000% increase in costs over five years. Council leaders warned at a recent summit that the crisis could spell the end for local government.  

In response to the pressures, Hackney Council is planning to set up a REIT and lease back 300 properties in bid to boost temporary accommodation. 

Councillors in Redbridge backed plans to purchase properties for temporary accommodation across the borough in a bid to ease a shortage and reduce costs.