Cost of housing homeless families could stop councils delivering on Andy Burnham housebuilding plans

Councils in England have warned the amount of money spent on housing homeless families in temporary accommodation has surged by 1,077% in just 13 years as local authorities face a £7 billion funding black hole.

A record 134,210 households live in temporary accommodation in England, up 5% in a year according to official figures, with the huge cost one of the leading reasons why councils are facing budget pressures.

New analysis from the Local Government Association (LGA) found that council expenditure on temporary accommodation grew by more than 11 times between 2011-12 and 2024-25.

That saw councils spend £6bn in real terms on housing homeless households in temporary accommodation over the period, with the £2.2bn spent between 2023-24 and 2024-25 making up more than a third.

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Local authorities have said the outlay is preventing them from investing in building new homes and preventing people from falling into homelessness in the first place. The LGA also said it is one of the reasons why councils are facing a £7bn funding gap over the next three years.

It’s a significant hurdle for prime minister-in-waiting Andy Burnham, who has pledged the “biggest council housebuilding programme since the post-war period”.

Councillor Eamonn O’Brien, chair of the LGA, said: “Temporary accommodation is a huge leak in council budgets that needs to be patched quickly and, at its heart, transform the lives of families and children across the country.

“While the government’s focus on prevention has been encouraging, we need both swift action and long-term solutions from the next prime minister and their administration.

“The way that councils are reimbursed by central government is not working, and it’s impacting the entire country due to the knock-on effect on budgets and all other services.

“The increasing use of temporary accommodation is not only financially unsustainable for councils but is hugely disruptive for individuals and families placed in them.”

LGA analysis shows that spending on temporary accommodation is largely concentrated in London but other regions around England are seeing a higher rate of spend.

Part of the problem councils face is that the housing benefit reimbursed from the government for temporary accommodation does not cover costs.

The LGA has called on the next prime minister to fix the issue, arguing that the drain on finances is having a knock-on effect on essential services.

Other asks in the LGA’s new Homelessness Position Paper include ensuring resources are aligned with prevention goals and an ask that local housing allowance rates for low-income renters cover the bottom 30% of local market rents.

Read more:

• Cost of housing homeless people in temporary accommodation soars to £2.8bn
• 104 children’s deaths linked to living in temporary accommodation: ‘We should be outraged’
• Labour’s choice to freeze local housing allowance will ‘condemn thousands to another grim winter’

Research from Crisis and Citizens Advice reported this week that private renters who receive housing benefit can now only afford just two out of every 100 rented homes on the market due to the continued local housing allowance freeze.

Councillor O’Brien said: “Ensuring there are sufficient homes for people is the foundation for strong communities – as our plan to tackle homelessness shows, councils are a key player in this effort and we look forward to working with the government towards this goal.”

Burnham also considers councils as a key player in tackling homelessness.

His recent agenda-setting speech announced a focus on a council housebuilding programme to move towards a “more preventative, productive state”.

“Having this focus on council homes again and building them in all parts of the country is a decisive shift to a more preventative, productive state, adopting a national Housing First policy as has been pioneered so successfully in Finland,” said Burnham in his speech at the People’s History Museum in Manchester on 29 June.

“If you don’t give people a good home, what chance have they got of having a good life? What chance have you got of making the health service sustainable if people are not living in good accommodation or getting a good education for kids? Everything starts with a good home and this country finally has to put that at the top of its priority list.”

Big Issue has been covering the temporary accommodation crisis in depth in recent weeks and now there is a new way to keep across one of the UK’s biggest issues.

Biggest Issue is the Big Issue’s brand-new Substack offering an in-depth look at temporary accommodation, showing how we’ve got to where we are, the people being affected and taking the stories in the mainstream media further.

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