Rising levels of homelessness and the increasing cost of placing families in temporary accommodation is having a devastating impact on council budgets, with over two-thirds of councils in England exceeding their homelessness budgets in the last year alone.
Figures compiled by the Local Government Association (LGA) show that 7 in 10 councils are having to spend more than they had budgeted for on homelessness services.
The LGA is warning that these vital services are being “pushed to breaking point” because of social housing shortages and cuts to housing benefits, leaving councils with no choice but to place more and more families in expensive temporary accommodation including bed and breakfasts.
Latest figures show that council spending in England on placing families in bed and breakfasts rose by more than a fifth in the last year, from £93.3 million in 2017/18 to £114.9 million in 2018/19. There are currently 7,110 homeless households in bed and breakfast accommodation in England – a 15-year high.
LGA analysis shows that 69.3% (226) of councils responsible for housing in England (326) exceeded their homelessness budgets in the last year.
Councils planned to spend a total of £502.7 million in 2018/19, but ended up overspending by a combined total of £140 million – almost a third more than they had budgeted for.
The LGA is calling on Government to allow councils to keep 100% of proceeds from Right To Buy to reinvest in new affordable homes.
They are also urging the Government to adapt welfare reforms to protect families at risk of becoming homeless, by restoring local housing allowance rates to cover at least the lowest third of market rents.
Cllr David Renard, the LGA’s housing spokesman, said: “Homelessness is a tragedy for every individual who experiences it and one of the most pressing issues facing councils and the Government.
“To reverse rising levels of homelessness, which represents huge human consequences and financial costs, the Government needs to invest in homelessness prevention.
“Councils want to work with government to be able to prevent homelessness before it happens, but as a result of unprecedented funding pressures, they are becoming increasingly limited in what they can do.
“We desperately need to be able to build more social housing to reduce the number of families being placed in temporary accommodation and bed and breakfasts.
“With adequate funding and powers, councils can boost efforts to prevent homelessness and get back to building the affordable homes the country needs.”