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Councils across England have demanded urgent government action to prevent the spiralling cost of providing temporary accommodation to people at risk of homelessness from overwhelming local budgets.
Half of all English councils — 158 local authorities — attended an emergency online summit on Tuesday hosted by Eastbourne borough council and the cross-party District Councils’ Network.
Council leaders warned of a disaster brought on by a severe shortage of social housing, a sharp rise in evictions and the cost of living crisis. The strain this is placing on budgets comes on top of existing financial pressures, with local government officials predicting that more than 20 councils are close to becoming in effect bankrupt.
In a letter that council leaders plan to send to chancellor Jeremy Hunt, they said the social safety net was at risk of collapsing as an unprecedented number of people facing homelessness turn to local authorities. This was causing councils to spend a record proportion of their budgets on provision of temporary accommodation, they added.
“The danger is that we have no option but to start withdrawing services which currently help so many families to avoid hitting crisis point,” the councils warned. They also requested a meeting with Hunt to discuss urgent remedial measures ahead of the Autumn Statement next month.
A string of councils, including Birmingham, have become insolvent in recent years as self-inflicted policy mistakes compounded the strains caused by cuts in funding from Westminster in the decade from 2010.
The Local Government Association, which represents councils across England and Wales, has warned for months that rising costs combined with increasing demand for services risks bankrupting more councils.
The LGA estimated that councils in England face an overall funding gap of £4bn over the next two years, up £1bn from its forecasts in July.
The number of households living in temporary accommodation in England rose by 89 per cent over the past decade, according to the LGA. At the end of March 2023, the figure stood at 104,000 — the highest since records began in 1998.
A severe shortage in social housing means councils have been forced to accommodate people in hotels and bed and breakfasts at a cost of at least £1.74bn in 2022-23, the LGA said.
Councils attending the summit on Tuesday demanded a rise in local housing allowance rates, an increase in the homelessness prevention grant and a review on the cap for housing benefit subsidy rates.
They also asked for more long-term funding to increase social housing supply, among other measures.
“Temporary accommodation is meant to be a safety net when times are tough. But if too many people are in the safety net it will collapse,” said Stephen Holt, Liberal Democrat leader of Eastbourne council, who initiated the meeting.
The Department for Levelling Up, Housing and Communities said the government was providing councils with £1bn in homelessness prevention grants over three years because it was “committed to reducing the need for temporary accommodation”.
“We are also delivering a fairer private rented sector for tenants and landlords through the renters reform bill, which includes abolishing Section 21 ‘no fault’ evictions,” it added.
Source: Economy - ft.com
