Bill for homeless accommodation soars to £1.2 billion

Posted 22 Oct 2020

With private landlords pocketing 87% of the cash as the housing crisis worsens

The government has released new figures today (Thursday 22 October) revealing how much money local councils in England spent on temporary accommodation for homeless households in 2019/20. They show:

  • Councils spent almost £1.2 billion providing temporary accommodation for homeless households between April 2019 and March 2020. This has increased by 9% in the last year and 55% in the last five years. 

  • Of the total spent on temporary accommodation by councils in England last year, 87% of it went to private landlords, letting agents or companies.

  • The amount of money being paid to these private accommodation providers has increased by 66% in the last five years from £621 million in 2014/15 to £1 billion in 2019/20.

  • More than a third (38%) of the money paid to private accommodation providers was spent on emergency B&Bs – £393 million – considered some of the least suitable places for families with children to live.

  • Spending on emergency B&Bs has increased by a staggering 73% in five years.

Polly Neate, chief executive of Shelter, said: “It is outrageous that almost £1.2 billion a year is spent on often shoddy and expensive temporary accommodation because of the lack of social homes. It’s a false economy for taxpayers’ money to be used to pay private landlords for grotty emergency B&Bs, which can be so terrible to live in that families end up deeply traumatised.

“The decades of failure to build social homes means too many people on lower incomes are stuck in unstable private rentals – increasing their chances of becoming homeless. This cycle of destitution persists when those who lose their homes turn to the council for help, because councils have so little social housing left that they can’t alleviate their homelessness for good. All they can do is pay over the odds for insecure temporary accommodation.

“If the government fails to act on this crisis, the economic chaos of the pandemic is only going to make what is already an awful situation worse, as even more people are forced into homelessness. The government must commit now to spending ‘smarter’ with a rescue package for social homes. By investing £12 billion over the next two years, we could build an extra 144,000 lower-cost homes, including 50,000 desperately needed social homes.”

ENDS

Notes to editors:

  • The amount spent on temporary accommodation (TA) by councils in England is published by the Ministry of Housing, Communities and Local Government (MHCLG): Revenue outturn housing services, LA drop-down.

  • The 2019/20 annual spend data is published here: Revenue outturn housing services (R04). In 2019/20 councils in England spent £1,186,130,000 on TA.

  • The figures relate to the period from April 2019 to March 2020 so mostly cover the pre-pandemic period. This means that much of the additional spending carried out due to the government’s ‘Everyone In’ initiative would not be included in the total spend in 2019/20.

  • We have calculated the amount spent on TA that is managed or owned by private landlords, letting agents or companies by adding up the following spending lines in the R04 tables: private managed accommodation leased by registered social landlords (RSLs), private managed accommodation leased by the authority, directly with a private sector landlord, bed & breakfast accommodation and other nightly paid, privately managed accommodation. Spending on this type of TA increased by 66% from £621,039,000 in 2014/15 to £1,033,429,000 in 2019/20.

  • We have compared 2019/20 data with 2018/19 and 2014/15 data to show the change over the last year and the last five years. The 2018/19 data is published here: Revenue outturn housing services (R04) and the 2014/15 data is published here: Revenue outturn housing services (R04)

  • The total amount spent on TA includes Department for Work and Pensions (DWP) funding through housing benefit, as well as funding from councils’ general budgets.

  • In 2019/20 councils spent £393,411,000 on B&Bs. As well as being expensive, B&Bs are regarded as one of the least suitable types of accommodation for families to live in. This is because they involve having to share facilities (bathrooms and kitchens) and often the whole family will also have to sleep in one room. There is a six-week legal limit on families being placed in B&Bs.

  • At the end of March 2020 there were 93,000 households living in temporary accommodation in England. This is available here: MHCLG, Live tables on homelessness, Statutory homelessness live tables, Table TA1

  • The number of households accommodated in temporary accommodation cannot be directly compared with the TA spend data because the number of households in TA is a snapshot figure whilst the amount spent on TA is an annual figure.