The District Councils’ Network (DCN) is calling for immediate action to ensure councils can afford to support vulnerable families after new data revealed the growing scale of the temporary accommodation crisis.
The Government’s latest statutory homelessness figures, published today, revealed a 15% increase nationwide in the number of households with children placed in temporary accommodation over the year to December 2023. There are now 71,280 households with children in temporary accommodation.
The overall number of households in temporary accommodation rose by 12.1% over the same period and now stands at 112,660.
DCN Chairman Cllr Sam Chapman-Allen warned that some district councils are now spending more than 30% of their net budget on providing temporary housing for homeless people. One council is spending almost half of the council tax it collects on temporary accommodation.
Cllr Chapman-Allen said: “The soaring cost of temporary accommodation threatens the financial sustainability of many well-run councils. Without further Government support, councils will be forced to cut other vital services to pay their temporary accommodation bills – including the very services that prevent homelessness in the first place.”
Total district council spending on temporary accommodation has rocketed 228% in just five years, from £66m in 2017/18 to £216m in 2022/23.
One of the key factors exacerbating this crisis is the inadequate Housing Benefit subsidy rate councils receive to fund temporary accommodation costs. The subsidy is still tied to 2011 rent levels, meaning many councils can claim back only a fraction of their actual costs. A recent DCN survey found that the subsidy covers just 38% of temporary accommodation expenditure on average, with one South East council able to claim only 14% of its costs.
In addition to the immediate support, the DCN emphasises the need for long-term solutions to minimise the reliance on expensive emergency accommodation. The best way to achieve this is by providing councils with new tools to build affordable housing for people experiencing or at risk of homelessness.
Cllr Chapman-Allen said: “Unless the Government acts now to unfreeze the Housing Benefit subsidy cap so it’s aligned with 2024’s costs – not 2011’s rates, many councils will be pushed to the brink of financial collapse.
“Rather than spending huge sums of money responding to a crisis, district councils want to prevent homelessness in the first place. To do this the Government needs to unshackle us so we can build housing which is both affordable for councils and residents, and provides the safety and security often lacking in temporary accommodation.
“Few councils can hope to build the required level of housing on their current budgets. So we propose exploring the creation of a new capital fund to incentivise councils to rapidly build or acquire new temporary accommodation and housing for homelessness, for example, modular homes, delivering long-term value for taxpayers.”
The DCN is calling for a meeting between the Secretary of States for the Department for Levelling Up, Housing and Communities (DLUHC) and the Department for Work and Pensions (DWP) and a cross-party group of affected councils, to discuss this issue further and identify potential solutions.
“The temporary accommodation crisis not only threatens council finances but undermines our efforts to improve the lives of our most vulnerable residents,” Cllr Chapman-Allen said. “By working with us on these proposals, the Government can support homeless families, prevent significant costs to public services further down the line, and deliver better value for money for taxpayers.”
