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Temporary Accommodation Costs

Volume 835: debated on Wednesday 31 January 2024


Asked by

To ask His Majesty’s Government what assessment they have made of the impact on local authority finances caused by the rising cost of temporary accommodation.

My Lords, local authorities deliver vital homelessness services, and we recognise the pressure that the cost of temporary accommodation places on councils. As we announced recently, total core spending power for councils in England will rise by 7.5% for 2023-24 to 2024-25—an above-inflation increase. In addition, we are providing more than £1 billion over three years to councils through the homelessness prevention grant, with a further £120 million UK-wide funding in 2024-25, announced at Autumn Statement, to help prevent homelessness.

I thank the Minister for that Answer. I recently visited a secondary school in Manchester which now has to make significant bespoke provision out of its school budget for pupils who are living in bed and breakfast hotels. Those students are only a tiny fraction of nearly 140,000 children in temporary accommodation, which represents a 14% rise in the last year. What assessment, if any, have the Government made of this issue? Will the Minister commit to improving the data available so that the impact of living in temporary accommodation on children, particularly on their education, can be fully understood, and local authorities can be supported to enable their schools to address and minimise it?

I thank the right reverend Prelate for that question. No one wants to see families with children in temporary accommodation, and I am sure that every local authority across the country is doing everything they can to stop it happening. But sometimes, in emergency situations, it is important for the short term that those families have a roof over their head, a safe and secure place to go. We continue to work with the Local Government Association and local authorities on how many there are in such accommodation, and what more we can do—for instance, stopping people going into temporary accommodation in the first place. With the £1 billion grant for local authority homelessness prevention, we can also start to improve the quality of any temporary accommodation that we might have to use.

My Lords, the right reverend Prelate is quite right to draw attention to the pressure on local authority budgets. Given the hundreds of millions of pounds that we are spending on accommodating illegal migrants, might a possible solution for the right reverend Prelate and his colleagues be to go through Division Lobbies and support the Rwanda Bill?

My Lords, I do not think that is within this Question. I will leave it to my noble friend to fight his corner on that one.

My Lords, many housing associations have been encouraged to develop homes for shared ownership, yet current trends illustrate that there has been a reduction in applications for this type of accommodation due to increases in mortgage rates and concerns regarding responsibility for maintenance—relating to the Grenfell Tower event. Can the Minister say whether capital could be made available for councils to purchase some of those empty properties and reduce temporary accommodation used for families?

Through their powers, local authorities can look to purchase accommodation. In the last two Budgets, we have given special dispensation to local councils, first, on special borrowing and, secondly, on their moneys from the right to buy. It is up to local authorities to look at the ways they can provide those houses, but I will take that back to the department as an idea.

My Lords, as the Minister has rightly said, the Government are allocating £1 billion to reduce homelessness. Unfortunately, it is clearly not working, as homelessness is at a 25-year high, with the result that local authorities have to spend increasing proportions of their budget on their statutory duty—which they want to undertake—to house people without a home. For example, Eastbourne Borough Council has an annual budget of £15 million but is spending £4.9 million each year on its statutory homeless duty. That is not sustainable. What are the Government to do?

As I have said, on 24 January, the Government announced additional measures for local authority funding worth £600 million, including £500 million of new funding for adult and children’s social care. It means that core spending powers will be up by £4.5 billion next year. This is what we are doing to help local authorities with all the pressures on their budgets at this time.

My Lords, local councils across the UK have warned that they are increasingly facing bankruptcy because of the rising cost of preventing homelessness. The National Housing Federation predicts that the number of children living in temporary accommodation will rise from 131,000 to 310,000 by 2045. It says that social housing waiting lists will grow to 1.8 million households by 2045—an increase of more than 50%. What practical steps are the Government taking to tackle the tremendous cost of temporary accommodation and homelessness?

I think I have already answered most of that. We have increased the amount of money going to the base budgets of local authorities across the country this year. We are giving money to prevent homelessness—which is as important as dealing with the issue. As I have said, we are giving money to councils so that they can build better properties and access better temporary accommodation. We are doing all we can in what has been quite a difficult economic climate. However, we are coming out of it, things are beginning to look better, and houses are being built.

My Lords, my noble friend will not be surprised to hear that I think we should be building a lot more houses. In the meantime, should we not consider amending the Renters (Reform) Bill, now in another place, to increase substantially the amount of long-term institutional investment in private renting and relieve some of the pressures on the market that we have been hearing about?

My noble friend is absolutely right. The Government will support institutional investment in the private sector as well as in the social rented sector, provided, of course, that they stick to the rules and we can regulate them. That includes Build to Rent homes, which can boost supply and drive up standards. We are offering support through the £1.5 billion levelling up home building fund being delivered through Homes England to provide loans, equity investment and joint ventures to encourage such institutional investment companies and to support new Build to Rent developments. I think they will be a growing part of the market.

My Lords, I declare an interest as chair of the Devon Housing Commission. I can confirm that the rise in temporary accommodation is not just in London and the conurbations. Devon is deeply affected, and that affects the budgets of local authorities. What progress is being made with the Government’s proposals to enable local authorities to limit the switching or changing of use of ordinary private rented accommodation into Airbnb holiday accommodation and short-term lets, which is having a huge effect in Devon and elsewhere?

The noble Lord is right. I am aware of this issue. I do not have the up-to- date facts with me so, if he does not mind, I will write to him.

My Lords, the last Labour Government almost did away with homelessness. It is a Conservative policy which has created this scandal for the British people. Does the Minister have a plan? If so, can she tell the House how much it would cost to end homelessness and how that money would be allocated? Otherwise, it will continue to be a blight on society.

My Lords, I wish it were as simple as that. Yes, we have a plan to build more houses in this country—importantly, more affordable houses and houses for social rent. As I said, at a time when we have been through a difficult economic situation, we have more people needing temporary accommodation. It is important that we are there to pick up those who need emergency roofs over their heads. They need to feel safe and secure. Quite honestly, I think they would rather be in temporary accommodation than on the streets.