New research published today (Friday 28th February) found the huge shortfall has come as a result of changes to the Homelessness Prevention Grant.
The first two months of 2025 have been far from satisfactory for English councils. From some having to be bailed out by the government to avoid bankruptcy, to the Local Government Association (LGA) now publishing new research which shows many are struggling with the demand for homelessness services.
Experts have outlined that on 30th September 2024, 126,040 households were in temporary accommodation – an increase of 15.7% from 2023.
With the Spending Review vastly approaching – the second half is due to be delivered in spring – the LGA are calling on the government to provide better support. Experts have claimed without it councils are having to plug the finance gap to meet their duties on temporary accommodation.
To give context on the severity of the situation, last year councils received £399.8million in grant funding to spend on domestic homelessness and temporary accommodation pressures, though the majority went on the latter.
Under new funding arrangements from 2025/26, while grant allocation has increased to £633million, at least 49% must now be spent on homelessness prevention and relief activities. This leaves only 51% available for temporary accommodation.
As a result the change means council have up to £76million less to spend on temporary accommodation compared to last year.
‘It is right that the government has increased its focus on prevention and relief of homelessness, however this sudden shift in funding allocation without a suitable transition period risks exacerbating the financial pressure councils are under at a time when temporary accommodation costs continue to rise dramatically,’ Cllr Adam Hug, housing spokesperson for the LGA said. ‘An uprating of the temporary accommodation subsidy is desperately needed to address the significant and growing cost pressures faced by councils.
‘As the Spending Review approaches, now is the opportunity for government to ensure councils are sufficiently resources to provide essential services and help boost growth to communities.’
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