Councils set to spend over £2bn housing homeless families this year

9 January 2024, 08:10 | Updated: 9 January 2024, 09:24

Miracle has been in a hotel room for eight months after being evicted from his bedsit
Miracle has been in a hotel room for eight months after being evicted from his bedsit. Picture: Supplied

By Connor Hand and Fraser Knight

Councils in England are on track to spend a record £2 billion on accommodation for homeless families in just one year.

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Disclosures from around 100 councils across England show that the spend on temporary accommodation in 2023/24 is projected to be 20% higher than last year’s £1.74bn, taking the total to just shy of £2.1bn.

Even adjusting for inflation, the figure is almost double what was spent just six years ago, sparking fears that more cash-strapped councils could go bust as a result of the increased costs of temporary accommodation.

As of November 2023, 104,000 households were being provided a room in a hotel, B&B or refuge centre after being made homeless. By comparison, when the Conservatives came to power in 2010, only 50,400 households required such provisions.

What’s more, despite the increased cost, there are concerns that the accommodation on offer is inappropriate for many people.

Miracle, who is registered blind and has epilepsy, has been in a hotel room for eight months after being evicted from his bedsit in Westminster, Central London. His temporary accommodation is in Brentford - a 45-minute journey from where he lived and his normal support network.

“It’s like a bit of a pause on [my] life. I’m in a situation where I’m not able to live life as I’d usually do,” he told LBC.

“It’s really taken its toll. Being somebody who’s visually impaired, it can often be a struggle in the dark, at night, trying to do things. It’s affected me emotionally as well.

“Living in a hotel room, you don’t have access to cooking facilities… sometimes I decide that it’s probably best to just have a snack and forget dinner. You don’t have washing facilities for your clothes, so laundry can be costly as well.

“[The council] said to me that they’d not put me somewhere and then just leave me there [but] when I moved in I was trying to contact the person that I was speaking with and they weren’t answering their calls - the communication is poor.”

Westminster City Council is projected to spend the most amount of money on temporary accommodation in England in 2023/24. Its figures show the bill being just short of £87 million - up from £60 million last year. The council says its spend "reflects [the] increasing need and rising costs of housing in the city", and that "it is no surprise that this issue is particularly acute in central London, where demand for homes is it at an all-time high".

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Since 2021, six local authorities have effectively declared bankruptcy, and there are concerns that as many as one in five councils won’t be able to balance their books over the next 15 months.

Croydon Borough Council issued an effective declaration of bankruptcy - a Section 114 notice - in 2022. Despite needing to cut its budget, though, the council's bill for temporary accommodation will surge by over 40% this year, taking the total figure to an estimated £21.5m.

The Local Government Association (LGA) has also warned councils in England face a funding gap of £4 billion over the next two years - up £1 billion from its forecasts in July.

Cllr Linda Taylor, housing spokesperson for the LGA, said: “Without a doubt some councils will have temporary accommodation costs as one of the contributory factors [for their budget shortfalls].

“We don’t have the financial resources to cover the gap between that local housing allowance and what landlords are asking for. And if we’re putting people into hotels, we know this is incredibly expensive so we need to get them out of temporary accommodation and start building for the future.”

Labour Deputy Leader and Shadow Levelling Up Secretary Angela Rayner told LBC that the soaring costs of temporary accommodation demonstrates “a chronic shortage in decent and secure affordable housing”.

Ms Rayner added: “The Tories have abandoned families across Britain. A toxic mix of rising rents and a failure to end no-fault evictions hit vulnerable people; it’s pushing more and more families into temporary accommodation and placing additional strain on council finances.

“The next Labour government will put an end to no-fault evictions and will deliver the biggest boost to affordable, social and council housing for a generation.” 

Ayla Ozmen, director of policy and campaigns at the poverty and housing charity Z2K, said: “Temporary accommodation is in crisis across the country. 

“Councils are spending more than ever, but people are still being placed far from home or in unsuitable accommodation – or sometimes both. And all too often, temporary accommodation is far from temporary.

“No-one should have to live in a hotel for months on end… Central government urgently needs to step up and fund councils to provide decent, local accommodation, as well as finally banning ‘no-fault’ evictions to stem the tide of homeless households.”

A spokesperson for the Department for Levelling Up, Housing and Communities told LBC: “Councils are ultimately responsible for their own finances, but we recognise they are facing challenges. That is why we have announced a £64 billion funding package to ensure they can continue making a difference.

“We are committed to reducing the need for temporary accommodation by preventing homelessness before it occurs in the first place, and we are providing councils with £1 billion through the Homelessness Prevention Grant over three years.”