The Labour Party government recently announced plans to move towards homelessness prevention. Meanwhile, local authorities are paying private companies billions of pounds to provide temporary accommodation to people experiencing homelessness – which is merely a reactive, crisis response rather than a genuine effort to address the problem.
The scale of the crisis
A recent analysis by Shelter estimated that 354,000 people are currently experiencing homelessness in England. This is an increase of 44,500 on the previous year. These figures do not include anyone classed as ‘hidden homeless’ – that is, anyone sofa-surfing, sleeping in cars or squats, or otherwise choosing to stay clear of homelessness charities or local authorities. This means the actual figure is even higher.
During Labour’s first budget announcement in October, Rachel Reeves included a measly £233m in extra funding to tackle homelessness. This was quickly followed by the Ministry of Housing, Communities, and Local Government announcing an additional £633.2m in December.
This money will be given to English councils from 2025-26 through the Homelessness Prevention Grant to support them to deliver services that both tackle and prevent homelessness. This is a funding uplift of £192.9m on 2024-25.
However, it seems that currently the majority of funding designated for homelessness is still being spent on temporary accommodation.
Not so temporary
The Conservative government promised, and failed, to end rough sleeping – which is only the most visible form of homelessness. Thousands of other people are forced to stay in hostels, bed and breakfasts, sofas, or even cars.
Ending rough sleeping simply makes the problem less visible. It would still exist – just out of the public eye.
Under both the Homelessness Reduction Act 2017 and the Housing Act 1996, local authorities have a duty to take steps to prevent homelessness. In England, local authorities also have a statutory duty to take steps to relieve homelessness if a household is already homeless when it approaches them for help.
Often, both of these come in the form of temporary accommodation. This can be hostels, temporary flats, supported accommodation, hotels, or bed and breakfasts.
According to the most recent figures, there are 326,000 people in temporary accommodation in England, with the majority being families and children. This is a 17% increase on the previous year.
And, in 2022–23, 18% of households in temporary accommodation in London were there for over 5 years.
What’s more, temporary accommodation is one of the most expensive forms of accommodation. The average rent in England costs £1,375 per calendar month. Temporary accommodation, however, is known to be far more expensive.
An analysis by the Centre for Homelessness Impact showed that from April 2023 to March 2024, local authorities reported that they spent £2.29bn on temporary accommodation. This is compared to £770 million on all other types of homelessness activity. Since 2010, spending on temporary accommodation has increased by 406%. Meanwhile, there was only an increase of 145% in the number of households experiencing homelessness over the same time frame.
“Prevent households from reaching crisis point”
The response to a recent Freedom of Information request to Croydon Borough Council laid out the average prices the council pays for temporary accommodation, per night. It stated that:
Rates are regularly reviewed and are subject to change at any time. The current rates are:
Studio – £30-40, 1 bed – £50 -65, 2 bed – £70 – 80 3 bed – £75 -90 4 bed – £95-115
This means that a month of temporary accommodation in a two bedroom property would cost £2,480. The monthly rent for a property of the same size in Croydon, according to the Office for National Statistics, would be around £1,477. This shows a 68% difference in the prices between temporary accommodation and settled accommodation. Obviously, over time that adds up.
Whilst Labour has only been in power eight months, there are clear steps it could be taking to turn the tide on these numbers.
Greg Hurst, Director of Communications and Public Engagement at the Centre for Homelessness Impact told the Canary:
So much spending on temporary accommodation keeps households living there for very long periods. This is a really expensive use of public funds.
He explained that many types of nightly paid accommodation – which is often not self contained – are far more expensive than other types of accommodation. This includes bed and breakfasts, hotels, and shelters. He said:
What the government can do is prevent households from reaching crisis point. Once they do, under the Homelessness Reduction Act, councils have a duty to provide housing for households in priority need that are not judged to be ‘intentionally’ homeless.
Years worth of damage
One way Labour could stop households from “reaching crisis point” would be to address the damage of years of devastating Conservative welfare cuts.
Leanna Fairfax, PhD student in women’s homelessness, spelled this out to the Canary:
I think it starts right back from the beginning, we need more social homes. Along with a regulated private rented system and the welfare cuts that have been implemented over the last 15 years need to be reviewed as these inter-relate with some of the issues as to why people are experiencing homelessness. Such as the benefit cap and two child limit.
A notable solution could come in the form of the Local Housing Allowance (LHA), which is linked to both housing benefit and Universal Credit.
The LHA is a flat rate benefit which allows people on low incomes to pay for private rented accommodation. It’s based on age, local rent prices, and other factors such as disability status or a history of being in care. Until 2013, it automatically reflected local rent prices, but the Conservative government froze it. This meant rent prices continued to increase, whilst the benefit did not.
Labour recently announced that LHA will once again be frozen in 2025. Research showed that last year, the LHA was almost one-third lower than average private rent prices. However, since then average rent prices in England have increased by a further 8.8%, to £1,375. LHA rates have still not changed, meaning the gap keeps growing.
Controversially, private renters under the age of 35 are only entitled to a shared accommodation rate – even if they live alone. This means increasing numbers of young people are experiencing homelessness, with a 10% increase in 2023-24 compared to the previous year.
In North Yorkshire, the average rent on a one bedroomed property is £562 – which is one of the cheapest in the country. The LHA rate amounts to £414.24. This means that 35% of the rent is not covered .
For under-35s, the difference is even greater as the shared accommodation rate is only £384.48 – meaning 46% of the rent is not covered.
This means that as rents continue to increase, instead of preventing homelessness like Labour claims it is trying to do, the LHA freeze means that homelessness figures are likely to keep increasing.
A political choice
Ultimately, if Labour was serious about preventing homelessness, or even ending it, it would start to tackle the systemic causes that it seems to be attempting to sweep under the rug.
Fairfax pointed out, for instance, that systemic sexism is one factor driving homelessness:
I think systemic causes of homelessness should be brought into discussion more. For example the role which gender plays in homelessness and how single mothers likely make up a large proportion of those new figures. The continued inequalities that women face along with the increased pressure of gender norms such as being the primary carer to children mean that women are at an increased risk to be reliant on the state and are a greater risk of the negative impacts of inadequate policies and funding.
Moreover, the LHA is a case in point of the choices our politicians make – which both put people at risk of homelessness, and keep people in homelessness for longer.
Unless Labour takes a long, hard look at the societal conditions fomenting homelessness, it can’t truly claim to champion prevention, and all its actions really amount to is more tinkering round at the edges of a socio-political problem of its own making.
Feature image shows Russ and Selma – via Centre for Homelessness Impact / Jeff Hubbard
