In FY 2023-24, English councils had an almost unbelievable expense of more than £2.1 billion for temporary accommodation. That’s a record high for this type of spending. Even worse, this spending surge is occurring at the same time the housing crisis in England is deepening. I know that many councils are having a hard time absorbing the financial burden of supporting these vulnerable populations as well. Crawley council spends 40% of its core budget on temporary accommodation. By comparison, Hastings council spends more than 50% of its net budget on meeting these same priorities.
Since then the situation has only got worse, with temporary accommodation households growing by 19%. Further, the annual government census, known as the “snapshot,” has shown a 20% rise in rough sleepers between 2023 and 2024. This is evidenced by these figures which paint an alarming picture of the deepening temporary accommodation crisis. Councils are currently unable to keep up with rising demand.
Record Spending and Its Consequences
Council spending on temporary accommodation has increased by 82%. Other councils are still now spending up to 50% of their core budgets housing people in hotels, B&Bs and emergency accommodation. Last year, there were 21 councils where over £1 out of every £10 available for core spending was allocated to temporary accommodation. For local authorities, the pressure is compounded by lack of funding. They’re only able to recoup a capped 90% of localized shared accommodation (eg, housing allowance) rates for short-term housing expenditures, a policy which hasn’t changed since 2011.
In reality, this translates to councils having to eat a painful cost. They succeeded in getting the Department for Work and Pensions to reimburse more than half of their temporary accommodation costs. Local councils are under severe financial strain already. They’ve spent less than £1 billion in their own funds, which is six times what they spent a decade ago when adjusted for inflation.
The Growing Need for Housing Solutions
Compounded by the current housing crisis, more families than ever are reaching out for help. More than 1.3 million households are on waiting lists for social homes in England alone. Housing associations have become increasingly prolific in recent decades. The overall number of social homes in England is still more than 100,000 below what it was in 2001.
The growing dependence on temporary accommodation is symptomatic of a deeper systemic housing market failure. After a pandemic that caused real-world rent increases to soar, it’s harder than ever for working families to afford housing stability. Consequently, many are looking to their local councils for help. As councils seek to deploy huge amounts of money on stopgap measures, the prospect for even more spending in the future is promising. If B & B rates continue to rise, the cost of council provision of emergency accommodation could increase. In fact, it might increase by a jaw-dropping 71% over that time!
Providers and Community Impact
A diverse list of organizations, providing a variety of temporary accommodation. It features national and local charitable organisations such as St Mungo’s and the YMCA, but hospitality giants including Travelodge and Premier Inn. These providers are essential in serving acute immediate housing needs, yet they do not have the capability to address the need underlying this crisis.
The use of such temporary accommodation only adds insult to injury for communities that are already facing substantial economic headwinds. Individuals and families placed in temporary housing often experience instability and uncertainty, making it difficult for them to rebuild their lives. As councils work tirelessly to address these urgent needs, the overarching question remains: how can the system be reformed to provide sustainable solutions and sufficient funding for permanent housing?