Councils in England have been forced to fork out £6.2 billion of taxpayer cash on temporary housing for homeless families and individuals over the last six years – including at least £1.9 billion on bed and breakfasts.
Housing charity Shelter said it “defies logic” for public money to be shelled out on “grim B&Bs and grotty flats instead of helping people to keep hold of their home in the first place”.
NationalWorld analysis of Department for Levelling Up, Housing and Communities (DLUHC) data shows councils spent £1.4 billion on temporary accommodation in 2021/22. The majority of the spend went to private landlords and accommodation providers. Councils also spent an additional £164.4 million on admin costs related to temporary housing, bringing the total spend to £1.6 billion.
B&B operators received £365.2 million of public money last year. In December NationalWorld revealed how over 2,300 families with children in England were stuck in B&Bs – which typically do not have their own cooking or bathroom facilities – at the last count in June. They were among 59,500 such families in temporary accommodation secured for them by councils under their statutory anti-homeless duties, alongside 35,400 households without children. In total, 120,700 children were affected.
Charities expect the number of families to be stuck in such housing to rise due to people losing their homes amid the cost of living crisis.
Councils have faced spiralling temporary accommodation bills in recent years, amid what Shelter has described as a “national housing emergency”. Since 2017/18, the total spend has risen by 42%, increasing from £996.7 million to last year’s £1.4 billion.
Some of the spend will be offset by income, such as through grants from central government or charging rent to the families housed. While the total spend fell by 1.7% last year compared to 2020/21 (likely due to the extra cost of bringing rough sleepers in off the street at the start of the Covid lockdown), the cost burden on council budgets after income is taken into account rose by 3%, from £443.2 million to £456.5 million. The figures do not account for inflation.
Since 2017/18, the cost burden has almost doubled, up from £234.4 million. Five years ago, 76% of the cost incurred by councils was covered by grants or charges, but last year they only recovered 68%.
Polly Neate, chief executive of Shelter, said the government’s decision to freeze housing benefit since 2020 has contributed to the problem, with families struggling to keep up with “rocketing” private rents.
In October, a probe by the Bureau of Investigative Journalism found 98% of rental properties listed on Rightmove in the UK in July were unaffordable for families on housing benefit. Researchers compared the prices of two-bedroom properties against their area’s two-bedroom Local Housing Allowance rate, which for instance a family of two parents and one dependent child would receive. In 19 areas, not a single affordable property was found across the entire month.
Ms Neate said: “Homelessness is bad for the economy and it’s even worse for the people whose lives it destroys. This gaping hole in our country’s safety net is throwing families needlessly into homelessness and trapping them in awful temporary accommodation because they can’t afford private rentals and there are barely any social homes.
"Allowing homelessness to rise unchecked during the cost-of-living crisis, will only cost more in the long run.”
The latest Office for National Statistics (ONS) figures show the average (median) cost of renting a two-bedroom property privately in England rose by 5.7% between October 2021 and September 2022 compared to the same period a year earlier, from £750 to £793. Worst affected was the South East, with rents up 7.6%, followed by the North West (6.1%) and the South West (6%).
Housing benefit will continue to remain frozen at April 2020 levels next year. The benefit – which is meant to cover the cheapest 30% of properties in a local area – is also based on the cost of rents in 2018/19, according to housing charity Crisis.
A Department for Levelling Up, Housing and Communities spokesperson said it is providing councils with £316 million this year to prevent homelessness.
They added: “Temporary accommodation is a last resort, but a vital lifeline for those at risk of sleeping rough.
“We know people are concerned about rising costs, which is why have announced the Energy Price Guarantee, to support household with their energy bills over the winter, and a further £37 billion of support for those struggling with the cost of living.”
Condemned: Britain’s Housing Crisis
The NationalWorld team is investigating the housing crisis blighting Britain. The current plight is years in the making, from renters stuck in mouldy homes to families unable to afford cladding repairs to make their flats safe. You can read more of our stories on the housing crisis here [link] and if you have a story to tell email [email protected].