Cost of tackling homelessness putting some local authorities under “unsustainable” financial pressure, at risk of s114 notice: National Audit Office

The London Councils group has called for a new approach to homelessness as a matter of urgency, after a National Audit Office (NAO) report revealed that local authorities spent more than £1.6 billion on temporary accommodation for people in need over the 2022-23 period.

In a report, The effectiveness of government in tacking homelessness, whose publication was delayed by the general election, the spending watchdog warned that dealing with homelessness is creating unsustainable financial pressure for some local authorities.

Local authorities spent £2.44 billion on delivering homelessness services in 2022-23. Some councils told the NAO that meeting their statutory duty could result in them issuing a section 114 notice.

The report suggested that the situation had worsened since the watchdog last examined the issue in 2017.

The NAO noted the Homelessness Reduction Act 2017 had extended local authorities’ statutory duties. However, despite the introduction of the 2017 Act, homelessness numbers are at a record level and expected to increase, with a high of 112,660 number of households in some form of temporary accommodation in Quarter 3, 2023-24.

The report said the temporary accommodation provided varied in quality and there were gaps in regulation. Some of that accommodation, such as B&Bs being used for households with children, was “unsuitable”.

The NAO acknowledged that the Ministry of Housing, Communities and Local Government (MHCLG) had developed much better homelessness data and stronger links with local authorities.

However, it added that it was clear that the previous government still had no strategy or public targets for reducing statutory homelessness, and MHCLG was falling behind on key programmes to improve housing supply.

“Funding remains fragmented and generally short-term, inhibiting homelessness prevention work and limiting investment in good-quality temporary accommodation or other forms of housing,” the watchdog said.

The NAO concluded that the government would not be able to demonstrate that it is delivering optimal value for money from its efforts to tackle homelessness until it resolves these issues.

The watchdog recommended that MHCLG begin addressing the issue by:

• adopting a genuinely cross-departmental approach to tackling homelessness, which might involve establishing a dedicated joint unit to oversee the implementation of the approach; and
• producing a long-term strategy, and associated public targets, with regard to statutory homelessness.

It also recommended that MHCLG should:

• explore how it can provide local authorities with greater predictability of funding for homelessness, within a spending review period;
• consider how it can support local authorities to focus more on homelessness prevention;
• consider how the quality of B&B accommodation could be improved;
• establish a way for local authorities to more easily understand innovative practice and potential solutions in homelessness services from other authorities; and
• consider how it might enhance its analysis function to improve its understanding of, and publish data on, repeat homelessness and out-of-area temporary accommodation placements.

In response to the NAO’s report, Cllr Grace Williams, London Councils’ Executive Member for Housing & Regeneration, called urgently for a new approach, referring to homelessness as a national emergency.

She said: “Every homelessness case is a human tragedy. One in every 23 children in London is currently homeless and living in temporary accommodation. These rates of homelessness have massive impacts on individual wellbeing and opportunities, as well as contributing to unsustainable financial pressures on council budgets.

 “But homelessness is not inevitable. As this report clearly demonstrates, government policy could be far more effective in tackling homelessness and getting to grips with its underlying causes. Better co-ordination across government departments, greater housing security, sufficient funding for councils, and more investment in building affordable homes are key to turning the situation around.

 “London boroughs are determined to work with the new government and the Mayor of London in tackling this crisis – there is not a moment to waste.”

Harry Rodd