Councils at breaking point over temporary accommodation costs, say MPs
A committee chair said local authorities are often ‘attempting to save a sinking ship with a little more than a leaky bucket’.
Councils are haemorrhaging funds as they attempt to meet the rising costs of record numbers of families living in temporary accommodation, MPs have warned.
The “crisis situation” facing local authorities means they are increasingly less able to spend on homelessness prevention, the Public Accounts Committee said.
Councils are instead having to prioritise short-term solutions which can include putting families in bed and breakfasts (B&B) – something the MPs said they are “alarmed” by, noting that such accommodation is now being used “routinely”.
The latest official figures, published in December by the Ministry of Housing, Communities and Local Government (MHCLG), showed there were 123,100 households in England in temporary accommodation in the three months to the end of June 2024 – a rise of 16.3% on the same period the previous year.
There were 159,380 children in temporary accommodation between April and June 2024, those statistics showed.
The committee highlighted high usage of B&Bs, and that in many cases families are staying far longer than they should be.
By law, B&Bs are meant to be used only for families in an emergency, and for no longer than six weeks.
The committee said: “It is unacceptable that, as at June 2024, almost 6,000 households with children were being housed in a B&B, of which almost 4,000 had been there for longer than the statutory six-week limit.”
The committee said temporary accommodation costs to local authorities had risen from more than £1.6 billion in 2022–23 to around £2.1 billion in 2023–24.
A “significant portion” of prevention grant funding is being used by local authorities to cover the costs of temporary accommodation, MPs said, with some councils even having had to ask MHCLG for “exceptional financial support”.
The committee said it is “not convinced” of the Government’s approach to setting local housing allowance (LHA) rates and the subsequent impact on homelessness.
It said some 45% of households now face a shortfall between their housing allowance and their rents and called for the Department for Work and Pensions (DWP), which sets LHA rates, to share its “justification” for the levels “both for individuals and for local authorities with regard to the temporary accommodation subsidy”.
Other recommendations included improving data on out-of-area placements as a “matter of urgency”, as the committee noted while it is known “too many people’s lives are disrupted by being placed in temporary accommodation outside of their local area”, MHCLG does not have detailed data on this subject.
MPs said lack of housing supply and suitability of accommodation are among the reasons some local authorities struggle to get people into temporary accommodation locally.
The committee called for an overarching homelessness strategy – something it said England is lacking, compared with each of the other three nations of the UK.
Last year, the new Government announced the launch of a cross-government inter-ministerial group on homelessness, to “drive progress on the development of our strategy to get back on track to ending homelessness, making sure we are working across government, and in partnership with local authorities and mayors, to tackle the root causes”.
Committee chairman Sir Geoffrey Clifton-Brown said: “My committee is 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.
“Worryingly there seems to be no desire to move away from an unsatisfactory short-term system, leaving local authorities attempting to save a sinking ship with a little more than a leaky bucket.
“Local authorities find themselves at breaking point as they haemorrhage funds to cover the rising costs of housing families in temporary accommodation.
“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.
“Government must learn from the lessons of the past to inform what they will do in the future.”
Adam Hug, housing spokesperson for the Local Government Association, said homelessness is “one of the biggest and most urgent pressures” facing councils, as he called for better financial support from central Government.
He said: “The temporary accommodation subsidy, currently stuck at 2011 levels, needs to be urgently addressed in the Spending Review as this is driving ever higher-spend on temporary accommodation and limiting the resources available for homelessness prevention.
“Continuing to up-rate Local Housing Allowance to the 30th percentile of local rents beyond 2025/26, will also help to ensure there is a sufficient supply of affordable properties available to those entitled to full support with their housing costs – this is crucial to helping households to find and sustain tenancies in the private rented sector and prevent homelessness.
“There also needs to be a genuine cross-departmental approach to tackling this crisis, as part of a long-term government strategy, with councils given the powers and resources needed to address the national shortage of affordable housing.”
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 £1 billion 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.”
