How the government can stop temporary accommodation breaking records

As the new Labour government gradually sets out its plans to “put Britain back on track to ending homelessness”, today’s publication of the latest homelessness statistics shows the scale and severity of the housing crisis they have inherited. Once again, the number of households in temporary accommodation has reached an unprecedented level of 117,450 households, including151,630 children: a trend of broken records that has persisted since December 2022. The previous record high had been set in 2005.

The number of households in temporary accommodation has reached a record high of 117,450, with 151,630 children affected. This alarming trend of record-breaking figures has continued unabated since December 2022.

The statistics are the latest indictment of the previous government’s inability to get a grip on homelessness, building on the National Audit Office(NAO)’s report concluding that the Department for Levelling Up, Housing and Communities, under successive Conservative Prime Ministers, had "failed to tackle homelessness" as a result of insufficient house building and support for local authorities, inadequate welfare benefits and stalled renter protections.

These publications reiterate what we already know: temporary accommodation must be at the heart of all government homelessness strategies if we are to effectively address our housing crisis. In this piece, we will compare the latest statistics with the targeted action we want to see from the government.

The number of households in temporary accommodation makes up by far the largest share of our homelessness statistics. Comparing quarter three of 2018-19 to quarter three of 2023-24, households in TA rose by 35% from 83,540 to 112,660. Today, that number sits at 117,450: an increase of 12.3% since last year and up by 4.3% since the last quarter.

It is widely recognised that building social homes is the most effective strategy for preventing and lifting people out of homelessness. The dwindling supply of social homes - significantly reduced by right to buy - pushes people into the private rented sector, where they face higher rents and less tenancy security. It also inhibits local authorities from securing affordable housing to transition people out of TA, as just 8.5% of private rented homes are affordable under Local Housing Allowance (housing benefit) rates, even after the April uplift. In this year’s Autumn Statement, our new Chancellor has an opportunity to permanently link LHA rates to cover the lowest 30% of rents, preventing and lifting thousands out of homelessness. Currently, a new freeze is set to begin in April 2025.

While we are already seeing positive first steps from the government on social homes, with Angela Rayner announcing to Parliament that they will lead a “council house revolution” and review Right to Buy to protect existing stock, they are yet to specify clear building targets. What we do know is that Labour has committed to a long-term housing strategy, which would be an ideal opportunity to announce public social housing targets, alongside targets for reducing statutory homelessness, as recommended by the NAO. This would demonstrate a marked change in approach from its predecessors.

Public housing targets, backed by a cross-governmental ending homelessness strategy with TA at its centre, would be a clear sign the new government understands the extent of our housing crisis and the scale of the response needed. It is hugely welcome that Labour promised to establish a cross-government unit to tackle homelessness in their manifesto, which would give this emergency the strategic focus it has desperately needed for so long. Today’s statistics demonstrate how bad the situation can get when this focus is absent.

Among the most worrying of the new statistics is a sharp rise in out-of-area placements from 33,350 households in the previous quarter to 36,360 households (an 11% increase and 31% of the total number of households in TA), as well as the 3,250 households with children living in B&Bs for longer than the statutory six-week limit (up by 79.6% on March 2023, and up 9.8% on the previous quarter). Both of these statistics highlight how the scarcity of adequate housing - a factor outside of the control of those affected - is forcing people to leave their support networks behind or cram their families into a single room with inadequate facilities.

Labour’s cross-government strategy must include targeted action to alleviate some of the worst effects of out-of-area placements and long-term B&B stays. This could include establishing a notification system that alerts education, health, social and homelessness services when a household is moved out-of-area, ensuring they do not lose support. For those stuck in B&Bs and those who will continue to be placed there until social housing stock is replenished, the government must urgently consider how to improve living conditions. As noted in NAO’s report:

Although renamed as the “Renter’s Rights Bill”, Labour has retained the commitment to establishing the Decent Homes Standard, but it is unclear whether this will be extended to TA. If TA is not included, the government must explore other ways they can enforce minimum standards. This could be achieved through a dedicated regulator, alongside increased funding for local authorities to ensure basic facilities are provided, from cooking equipment to disability adaptations.

As numbers in TA soar and its consequences for affected households deepen, so does the financial burden on councils. In 2022-23, local authorities spent over £1.6 billion on temporary accommodation. Some are even spending up to half of their total net budget on providing TA. In London, spending on TA has increased by 25% in the past year alone.

Councils, scrambling to find the best options for those in need of immediate support, are spending a significant portion of the Homelessness Prevention Grant on providing temporary accommodation instead of prevention work. This strain on council resources pushes more people into TA who could have been supported through preventive measures. With the number of people in TA continually rising, funding allocation must be sufficient to equip councils to prevent homelessness and minimise reliance on TA as a long-term solution.

“As part of the next spending review, and to support a cross-cutting approach to tackling homelessness, we recommend that HM Treasury should: review and seek to simplify cross-departmental funding for homelessness; and consider ways to incentivise government departments to support homelessness prevention, to deliver better outcomes and improved value for money” - NAO report

Given the gravity of today’s statistics and the worrying trend of them getting worse, it can feel like there is no light at the end of the tunnel. However, we have reduced these numbers before and through a clear, targeted and comprehensive homelessness strategy, we can do it again. NAO attributes the 52% reduction in households in TA between 2004 - 2010 to “ a public commitment to halve the number of households, coupled with significant investment and proportionately higher Housing Benefit.” This is exactly the roadmap our government can build on and Angela Rayner’s cross-government ‘Ending Homelessness’ unit is a vehicle through which to do that.