One of the biggest drains on local authorities’ squeezed budgets is paying for temporary accommodation for people who fall into homelessness, usually through no fault of their own. It is not, in east London where Local Space operates, a ‘lifestyle choice’.
As the numbers of people requiring assistance with housing, temporary or settled, remorselessly increases in line with the rising cost of living, interest rates and rents, the bill for local authorities to fulfil their statutory duty to assist also climbs higher. No ceiling – for all concerned.
It is a crisis pushing some local authorities close to the financial brink as the duty to help the homeless threatens to overwhelm budgets. Many councils are spending millions a year on temporary accommodation doing exactly this. A recent report in The Guardian included a table from the Department for Levelling Up, Housing and Communities, which showed net spend in 2022-23 on temporary accommodation across 20 southern authorities ranging from 10% of core budgets to just under 50%.
Those levels of spending will bite into other services councils must provide. As is widely acknowledged and frequently criticised, spending on costly and variable-quality private temporary accommodation is not the best use of public money.
Private landlords are further constricting supply by quitting the marketplace and presumably finding better uses for the capital released, adding to upward pressures on rents within a dwindling supply of homes for rent.
Politicians are increasingly willing to acknowledge the housing crisis, if stopping short of doing enough about it. It’s at the top of most political agendas.
The impact at the margins of an inadequate supply of temporary accommodation is huge, on individuals’ lives and on public sector budgets, not least social services. Providing timely assistance is necessary so people avoid becoming homeless. The best solution is to provide help with settled accommodation, for a longer term than ‘temporary’ implies, giving people enough time, in a quality home, to get their lives back on track, especially if that takes people out of a tent if that’s where their problems have unavoidably led them.
To tackle the persistent problem of lack of supply, we recently signed a deal with the London Borough of Newham to lease 102 new homes at three sites in Newham, including, for example, 43 new private for-sale homes in Cornwell House at Barratt Developments’ New Market Place in East Ham.
Newham bought all 102 homes across the three sites and leased the properties to us, to manage on its behalf, and make them available at intermediate rents at Local Housing Allowance rates. They are being let to nominees from the council’s homeless list.
The council is committed to buying 500 new homes across Newham to reduce as fast as possible the number of its homeless households. This deal is a significant step to achieving that target, and good news for developers in the borough. A number of similar deals will be secured later this year and other boroughs are looking for similar acquisitions.
It’s that kind of commitment and innovation, from councils like Newham, from organisations and interested developers, that will make all the difference to people facing homelessness.
Josie Parsons is chief executive of Local Space