The National Audit Office's recent report scrutinises the previous government's approach to homelessness, focusing on the Ministry of Housing, Communities, and Local Government (formerly DLUHC). The report criticises the government's fragmented, short-term funding strategies and lack of a comprehensive homelessness strategy, calling for long-term solutions, cross-departmental collaboration, and improved support for local authorities.

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Why is homelessness on the rise?

Outlining the causes behind rising rates of homelessness, the report shows that welfare reforms, such as capping Local Housing Allowance (LHA), reduce the amount of benefits families can receive, whilst rents have continued to rise. In addition, a lack of housing for social rent has pushed families into the private rented sector, which is less secure and more expensive.

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These factors have resulted in rates of homelessness at record highs, with a 35% increase in those in temporary accommodation between 2019 to 2024. In order to accommodate these rising numbers, local authorities have had to double their spending on homelessness services. The report found that increased spending on homelessness services, specifically temporary accommodation, has put increased financial pressure on local authorities, with significant spending going towards poor quality accommodation, like B&Bs and hotels.

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These last-resort measures are meant to be short-term; however, in Quarter 3 of 2023-24, around 2,960 families with children remained in a B&B for longer than six weeks. Not only is temporary accommodation costly for local authorities, but this poor quality accommodation is unsuitable for families and children.

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Barriers to Impactful Progress  

DLUHC has developed relationships with some local authorities, demonstrating progress towards transformative change. However, it is limited by the government’s lack of strategy for ending homelessness.

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The short-term nature of funding that local authorities receive poses significant financial pressures and makes it difficult to optimise the use of temporary accommodation. The approach of simply managing recurring issues, rather than investing in long-term solutions, is costing English councils £1.6bn a year in temporary accommodation costs alone. A significant part of the Homelessness Prevention Grant goes towards funding temporary accommodation, rather than on homelessness prevention, providing a band-aid solution to a deeper issue.

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Another barrier in tackling homelessness is the lack of available housing and shortfalls in the creation of new homes. Economic changes and inflation have resulted in the government missing its target of creating 300,000 new homes per year by the mid-2020s.

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NAO’s Recommendations

Recommendations by the National Audit Office based on evidence and analysis of DHLUC’s approach to tackling homelessness, include adopting a cross-departmental approach, implementing long-term strategy,  providing more support to LAs, improving quality of temporary accommodation, and incentivising government to support homelessness prevention. These recommendations are based on conclusions that whilst DLUHC has developed stronger relationships with LA, the lack of government strategy hinders the implementation of these programmes.

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These recommendations and the implementation of a long-term, collaborative strategy is crucial in addressing the homelessness crisis and creating sustainable progress. In addition to the Ministry of Housing, Communities, and Local Government and collaboration with government, the support of external organisations is also valuable in addressing shortcomings.

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Personalised Budgets As A Solution

The personalised budgets Greater Change provides are one method of helping both individuals out of homelessness, and supporting local authorities in relieving financial pressures. Our work within local authorities means that by providing individuals with a one-off financial boost, they are able to dictate what they need to move out of homelessness, secure stable housing and employment, and move out of temporary accommodation.

This in turn relieves pressure on local authorities, as supporting each person costs just £1,319 on average including operational costs, unlocking savings to the public purse of £35,117 each, a return of over 20x. Collaboration between government, local authorities, and partner organisations, and strategic long-term goals are crucial in tackling homelessness in the UK.