LGA analysis of the Revenue Account Budget Data shows that council spending on homelessness for 2023/24 when compared with 2015/16 has increased by 42% – about £733m
The percentage of councils’ total housing budget being spent on homelessness and temporary accommodation has tripled since 2015, new analysis from the LGA reveals.
The data shows that councils spent £315m on homelessness in 2015/16 – in 2023/24 they are spending £1.048bn but may be more when official figures are released.
At least 113,000 households are waiting for social housing
In 2015/16, 18% of councils’ total housing budgets were allocated to homelessness, whereas in 2023-24 spending on homelessness now accounts for 60% of total housing budgets, which means councils have less money to invest in and run homelessness early prevention services.
The LGA warned that councils are spending at least £1.75bn annually on supporting nearly 113,000 households in temporary accommodation due to a lack of social housing.
Without a concerted effort to address the severe housing shortages, and increase councils’ stock of available social housing, these figures are likely to rise further with an even higher percentage of councils housing budgets being spent on homelessness.
Therefore, as part of the Local Government White paper, the LGA is calling on whoever forms the next government to give councils and combined authorities the powers to build more affordable, good quality homes at scale for people in the areas where they are needed.
Recommendations to the next government include:
- Reform of Right to Buy to support 1:1 replacement of existing social housing to avoid continued net loss of stock. This should include allowing councils to retain 100% of sales receipts; flexibility to combine receipts with other government grants; the ability to set the size of discounts locally; and exempting new build.
- Abolition of permitted development rights and reform of viability assessments for proposed housing developments, with all planning applications required to deliver affordable housing requirements as per Local Plans.
- Bring forward new legislation to ban Section 21 “no fault” evictions of renters.
- Further investment in social housing by allowing local government continued access to preferential borrowing rates through the Public Works Loan Board for housing, with each additional £5m provided through this scheme estimated to provide up to £150m in savings and additional investment into social housing.
- An increase in Affordable Homes Programme (AHP) grant levels per unit to deliver more new affordable homes and ensure inflationary pressures do not jeopardise continued delivery.
- A commitment to uprate LHA rates to the 30th percentile of local rents beyond 2025/26.
- An immediate increase in the subsidy for temporary accommodation, so that it is no longer frozen at 90 per cent of 2011 LHA rates.
Increasing affordable housing stock is necessary to reduce council spending on homelessness
Cllr Claire Holland, housing spokesperson for the Local Government Association said:
“Homelessness pressures on councils are spiralling as a larger proportion of their budgets is put towards costly temporary accommodation due to a lack of social housing.
“The way to properly resolve the issue is to address the shortage of suitable housing across the country and build up councils’ stock of social housing.
“Councils need to be given the powers and resources to build affordable homes their communities need so they can resume their historic role as a major builder of affordable homes.”
