Record levels of homelessness are placing unsustainable pressure on councils’ crumbling finances, an influential committee of MPs has warned as the annual cost of emergency accommodation rose by almost a third.
The booming use of temporary accommodation for homeless families by local authorities has led to a “crisis situation” that must be urgently dealt with across government, a report from the Public Accounts Committee has found.
Some 123,000 households in England are being housed in temporary accommodation, which can include hotels and B&Bs, the latest data from June 2024 showed. The cost to councils of providing this emergency accommodation has risen to £2.1bn for the financial year 2023/24, up from £1.6bn the year before, MPs found.
Sir Geoffrey Clifton-Brown, chair of the committee, said local authorities had been left trying “to save a sinking ship with little more than a leaky bucket”. He warned that councils were “haemorrhaging funds to cover the rising costs of housing families in temporary accommodation”.
The committee called on ministers to come up with a plan to bring down the number of people becoming homeless in the first place, reduce the cost of expensive temporary housing, and fund councils with multi-year commitments.
open image in galleryThe number of households facing homelessness exceeded 320,000 between 2023-24, according to government data (PA)
The number of households facing homelessness exceeded 320,000 between 2023-2024, the highest on record. The rise has been fuelled by a rise in rental costs, coupled with a failure of benefits and pay to keep up with the surging cost of living.
In a report published on Friday, MPs warned government that there was little money left for homelessness prevention, with local authorities focused on funding support for people who are already facing the streets.
MPs said it was “unacceptable” that B&Bs were being routinely used to house people and not as a last resort – warning that children were being put at risk by the precarious accommodation. Data from June 2024 showed that almost 6,000 homeless families with children were being housed in B&Bs, and almost 4,000 families had been there for longer than six weeks.
Due to a lack of affordable housing, councils are also struggling to house families in temporary accommodation in their local area. The number of households placed out of area has risen by a staggering 42 per cent from 2018/19 to 2023/24.
The cross-party group of MPs also said that Local Housing Allowance rates didn’t match rental costs. Some 45 per cent of households now face a shortfall between the housing allowance they receive and the rent they pay, the report found.
Sir Geoffrey Clifton-Brown, a Conservative MP and chair of the committee, said they were “deeply concerned by the number of people currently being housed in sub-standard, overpriced and at times, wholly inappropriate accommodation, sometimes a long way from their previous home.
“A lack of affordable housing, a focus on short-term solutions and no clear strategy to tackle this issue have left us with thousands of families in deeply troubling circumstances.”
open image in galleryThe government says it has inherited a homelessness crisis (PA Wire)
He added: “We are calling for an overarching strategy that addresses the need for better connectivity across government departments to tackle the root causes of this crisis. Without one, we fear this will remain an issue into which money is simply poured, without effectively tackling the blight of homelessness.”
Matt Downie, chief executive of Crisis, said: “Living costs and rent have been skyrocketing, and homelessness increasing. Local councils are stuck between a rock and a hard place, due to limited funds, and the impact on people facing homelessness has been catastrophic.”
Cllr Adam Hug, housing spokesperson for the Local Government Association, said: “Homelessness is one of the biggest and most urgent pressures facing local government. More and more people turn to their council for support and councils have little choice but to resort to costly temporary accommodation, leading local authorities to spend less on funding homelessness prevention.”
A government spokesperson said: “These figures are completely unacceptable and demonstrate the devastating homelessness crisis we have inherited.
“This is why we are taking urgent and decisive action to end homelessness for good, including committing £1bn in additional support for homelessness services and address the use of emergency accommodation.
“We’re talking the root causes of homelessness, committing in our Plan for Change to build 1.5 million new homes, which includes building the social and affordable homes this country needs, and are changing the law to abolish Section 21 ‘no fault’ evictions – immediately tackling one of the leading causes of homelessness.”