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Councils' budget set aside for homelessness has more than tripled in the last eight years, LGA warns 

The percentage of councils’ total housing budget being spent on homelessness and temporary accommodation has more than tripled since 2015, new analysis from the LGA reveals.

The percentage of councils’ total housing budget being spent on homelessness and temporary accommodation has more than tripled since 2015, new analysis from the LGA reveals.

The LGA, which represents councils across England and Wales, is urging the next government to relieve pressure on council budgets by resetting the relationship between local and national government, and committing to our priorities to drive inclusive growth and ensure future sustainability for councils.

LGA analysis of the Revenue Account Budget Data shows that council spending on homelessness as a share of total housing expenditure for 2023/24 when compared with 2015/16 has increased by 43 percentage points - about £733 million.

The data - which is the set council budget at the start of the financial year - shows that councils were anticipating to spend £315 million on homelessness in 2015/16, compared with £1.048 billion in 2023/24.

In 2015/16, 18 per cent of councils' total housing budgets were allocated to homelessness, whereas in 2023-24 spending on homelessness now accounts for 60 per cent of total housing budgets, which means councils have less money to invest in and run homelessness early prevention services.

The LGA previously warned that councils are spending at least £1.75 billion annually on supporting nearly 113,000 households in temporary accommodation due to a lack of social housing. Without concerted effort to address the severe housing shortages, and increase councils’ stock of available social housing, these figures are likely to rise further with an even higher percentage of councils housing budgets being spent on homelessness.

Therefore, as part of the Local Government White paper, the LGA is calling on whoever forms the next government to give councils and combined authorities the powers to build more affordable, good quality homes at scale for people in the areas where they are needed. This includes:

  • Reform of Right to Buy to support 1:1 replacement of existing social housing to avoid continued net loss of stock. This should include allowing councils to retain 100 per cent of sales receipts; flexibility to combine receipts with other government grants; the ability to set the size of discounts locally; and exempting new build.  
  • Abolition of permitted development rights and reform of viability assessments for proposed housing developments, with all planning applications required to deliver affordable housing requirements as per Local Plans.  
  • Bring forward new legislation to ban Section 21 “no fault” evictions of renters.  
  • Further investment in social housing by allowing local government continued access to preferential borrowing rates through the Public Works Loan Board for housing, with each additional £5 million provided through this scheme estimated to provide up to £150 million in savings and additional investment into social housing. 
  • An increase in Affordable Homes Programme (AHP) grant levels per unit to deliver more new affordable homes and ensure inflationary pressures do not jeopardise continued delivery.  
  • A commitment to uprate LHA rates to the 30th percentile of local rents beyond 2025/26.  
  • An immediate increase in the subsidy for temporary accommodation, so that it is no longer frozen at 90 per cent of 2011 LHA rates. 

Cllr Claire Holland, housing spokesperson for the Local Government Association said:

“Homelessness pressures on councils are spiralling as a larger proportion of their budgets is put towards costly temporary accommodation due to a lack of social housing.

“The way to properly resolve the issue is to address the shortage of suitable housing across the country and build up councils’ stock of social housing.  

“Councils need to be given the powers and resources to build affordable homes their communities need so they can resume their historic role as a major builder of affordable homes.”  

Notes to editor

  1. The LGA’s Local Government White Paper sets out how a reset relationship between central and local government is the only way whoever forms the next government can tackle the challenges facing the country. It includes analysis showing councils in England face a funding gap of £6.2 billion over the next two years.
  2. Our dedicated General Election hub sets out the key commitments in the Conservative, Green, Labour and Liberal Democrat national manifestos relevant to local government.