The District Councils Network has called on the government to take immediate action to support councils as they help vulnerable families.
This call comes after the government’s latest statutory homelessness figures were released yesterday, with the statistics outlining a 15% increase in the number of household with children that are placed in temporary accommodation over the year up to December 2023. That figure brings the number up to a staggering 71,280 households with children in temporary accommodation.
There was also a 12.1% increase in the overall number of households living in temporary accommodation, with that number standing at +112,660.
“Many councils will be pushed to the brink of financial collapse.”
According to the DCN, one of the main contributors to this crisis is the fact that the Housing Benefit subsidy rate that councils are given to fund temporary accommodation in their area is still tied to the 2011 rent levels. Costs have increased over the 13 years since, meaning that many councils are now only receiving back a fraction of their actual temporary accommodation costs.
The increase in costs is not a small one, either, with district council spending on temporary accommodation rising by 228% in the last five years alone, as it went from £66 million (2017-2018) to £216 million (2022-2023).
Chairman of the District Councils Network, Cllr Sam Chapman-Allen, commented:
“The soaring cost of temporary accommodation threatens the financial sustainability of many well-run councils. Without further government support, councils will be forced to cut other vital services to pay their temporary accommodation bills – including the very services that prevent homelessness in the first place.
“Unless the government acts now to unfreeze the Housing Benefit subsidy cap so it’s aligned with 2024’s costs – not 2011’s rates, many councils will be pushed to the brink of financial collapse.
“Rather than spending huge sums of money responding to a crisis, district councils want to prevent homelessness in the first place. To do this the government needs to unshackle us so we can build housing which is both affordable for councils and residents and provides the safety and security often lacking in temporary accommodation.
“Few councils can hope to build the required level of housing on their current budgets. So, we propose exploring the creation of a new capital fund to incentivise councils to rapidly build or acquire new temporary accommodation and housing for homelessness, for example, modular homes, delivering long-term value for taxpayers.”
Alongside the call for support, both in the short and the long term, the District Councils Network has requested a meeting between a cross-party group of affected councils, the Secretary of State for Levelling Up, Housing and Communities, and the Secretary of State for Work and Pensions to discuss the issue further and work out a political solution to the challenge.
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