Expenditure on temporary accommodation increased tenfold between 2011-24, as LGA launches outline for plan to tackle homelessness

New analysis from the Local Government Association (LGA) has found that council expenditure on temporary accommodation (TA) increased by a massive 1077 per cent in real terms between 2011/12 and 2024/25. 

This equates to councils spending £6 billion (1) across this 13-year period. Of this, £2.2 billion, over one third (37 per cent) was in the two-year period of 2023/24 and 2024/25 alone (2). 

The LGA said councils would much rather invest this scarce resource in building new affordable homes and preventing homelessness happening in the first place.

Released as the LGA holds its Annual Conference in Bournemouth, the analysis shows how the issue is widespread across the country, with all regions of England seeing significant increases (3).

TA spend continues to be concentrated in London, but there are clear signs of pressure across the country with several regions seeing higher rates of increase in spend, albeit from a lower base.

TA is a major drain on council finances, with local authorities having to stretch budgets further and further, as more people turn to their council for support with housing. 

While households receive the full housing benefit they are entitled to, the amount councils can claim back from the Department for Work and Pensions is currently capped to 90 per cent of Local Housing Allowance (LHA) rates from back in 2011.

This means councils are not able to claim back costs that reflect what they are spending, and it is increasingly getting worse as the demand for TA rises and they can claim back less.

This is a major issue for council finances, and is having a knock-on impact on other essential services. 

As a new Prime Minister is set to take office, with an opportunity to redress this balance and help put local government on a stronger financial footing, the LGA is calling on the Government to address this issue urgently by uprating the LHA rate councils can be reimbursed to 90 per cent of the prevailing LHA rates.

The LGA is also releasing its new Homelessness Position Paper (HPP) to outline a comprehensive plan that councils need from a new government to effectively tackle homelessness. 

The key asks from the paper are:

• Creating accountability: ensuring that stakeholders are incentivised to prevent homelessness and held to account for delivering their role in prevention and that the cross departmental targets are across delivery considerations.
• Ensuring deliverability: Resources are aligned with preventative goals, are flexible and stable in the long-term, and sufficient for stakeholders to effectively deliver their role in homelessness prevention. This includes:
  • A commitment from government to support local authorities with the increasing costs of temporary accommodation
  • Uprating the temporary accommodation subsidy rate to 90 per cent of the prevailing LHA rate.
  • Ensuring LHA rates at minimum keep pace with the bottom 30% of local rents alongside reviewing the shared accommodation rate and the benefit cap
• Fostering collaboration: Creating the conditions for effective local-level partnerships and ensuring that implementation is guided through collaboration between local and central government, as well as third sector partners.  
• Driving evidence-based policy: driving and sharing the results of experimentation and rigorous evaluation and supporting efforts to scale proven interventions. 

Cllr 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.

“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.” 

Notes to Editors

The analysis was conducted using government data on local government expenditure on temporary accommodation which is available here: Local authority revenue expenditure and financing - GOV.UK

1) All figures are in real terms (2024/25 prices) based on the CPI deflator. To ensure continuity over the time period we exclude spend on temporary accommodation administration costs. The analysis focuses on council’s net revenue expenditure (NRE) on TA. This is spend funded by councils’ own resources including council tax and grant funding. It does not include spend on TA covered by contributions from DWP and service users.

2) The breakdown of regional figures is below: Graph of England Councils TA NRE available on request. 

3)The breakdown of regional figures is below:

Please find link to Homelessness Position Paper here

 ENDS