Shortfall in London councils’ budgets increases to £600m

London Councils forecast that boroughs will collectively overspend on their homelessness budgets this year by £150m, up from £90m as previously estimated.

In August, the group warned that almost 170,000 Londoners – or one in 50 people – are currently homeless and living in temporary accommodation.

London Councils called on central government to increase councils’ overall funding by at least 9% and uplift Local Housing Allowance and the homelessness prevention grant.

The group is also calling for reforms to the “broken” local government finance system, such as giving councils longer-term funding settlements and more devolved powers.

Claire Holland, acting chair of London Councils, said: “London’s worsening homelessness crisis is wreaking havoc on council budgets. With one in 50 Londoners homeless and living in temporary accommodation arranged by their local borough, the human cost is enormous and financial cost utterly unsustainable.

“Alongside massive demands on adult and children’s social care services, spiralling inflation, and insufficient funding from government, boroughs are left in an extremely precarious position.

“The chancellor must use the Autumn Statement to help councils weather the storm. We urgently need more funding support to stabilise budgets and sustain local services.”

A government spokesperson said: “London boroughs have seen an increase in core spending power of up to £744m (9.3%) on 2022-23 – making available a total of up to £8.757bn in 2023-24.

“We are determined to prevent homelessness before it occurs and are providing London councils with £350m funding through the Homelessness Prevention Grant to help those at risk access the private rented sector.”