Why are we spending billions on sustaining homelessness when we have the tools to end it altogether?

Jasmine Basran, Head of Policy and Campaigns

07.09.2018

New research published last week by Inside Housing has shown that between 2013/14 and 2017/18, English councils have spent £3.87 billion on temporary accommodation for homeless households. Given councils only cover about 20% of this spend themselves, this means the Government has spent a staggering £3 billion on housing benefit to keep people in temporary accommodation across England.

There’s no doubt this is a significant amount of money – a sum that could have been used to prevent people from becoming homeless in the first place, or end their homelessness for good. Instead the money has simply sustained a crisis response to homelessness.

Homelessness is not inevitable and can be ended. Earlier this year we published our plan to end homelessness in Great Britain, Everybody In. The plan shows that homelessness has a root in policy choices. Time and time again, these choices lead to funds and resources being spent on preventable situations.

One of the foremost among these is a welfare system that no longer covers even the cheapest homes in the private rented sector. Our research with the Chartered Institute of Housing revealed the choice to freeze housing benefit until 2020 is making it near impossible for people to afford to rent privately - someone needing a one-bedroom property, for example, will find housing affordable in just 20% of the country.

As a result, more and more people are facing difficult day-to-day choices; do they pay their rent only to go without essentials like food and clothes? As these dilemmas mount and limited budgets dry up, keeping up with the rent becomes more difficult and the risk of eviction and homelessness increases. It is no surprise that the leading cause of homelessness in England is the loss of an Assured Shorthold Tenancy.

The knock-on effect is clear: more and more households become homeless, councils are put under more pressure to find accommodation, and the Government is left with a £3 billion temporary accommodation bill.

It doesn’t need to be like this

By tackling the root causes of homelessness and adopting a housing-led strategy, we can put an end to this false economy. This means building the affordable homes we need and moving all those in temporary or emergency accommodation into safe, stable and permanent housing.

Not only would this end the limbo of temporary accommodation for those trapped for months or even years at a time, it would also make economic sense. Instead of spending billions each year on keeping people in temporary accommodation unnecessarily, we could be helping people into permanent accommodation, providing long-term support for those who need it, and preventing people from becoming homeless in the first place. Research by PwC for Crisis has estimated that the total costs of supporting homeless people to end homelessness, including by preventing homelessness from happening altogether, would cost £9.9 billion over ten years and deliver benefits worth £26.4 billion. It’s a no-brainer.

Earlier this month, the government published its much-needed Rough Sleeping Strategy, which sets out how it will deliver on its commitment to end rough sleeping by 2027. While it is a positive step forward in some ways, it still does not address the drivers of the issue that have their roots in welfare and housing. The government should focus funding on ensuring we have a welfare system that covers the cost of renting, and housing-led solutions to end homelessness. Unless these are addressed, we will continue to need a crisis response to homelessness.