Polly Neate, chief executive of Shelter, said: “It’s absurd that we keep throwing good money after bad into grim homeless accommodation instead of investing in solutions that would help families into a safe and secure home.
“Decades of failure to build enough social homes combined with runaway rents and rising evictions has caused homelessness to spiral. Too many children are being forced to grow up homeless in grotty, cramped hostels and B&Bs, sharing beds with their siblings, with no place to play or do their homework.
“Rather than sinking billions into temporary solutions every year, the government must invest in genuinely affordable social homes and support councils so they can start building them. Building 90,000 social homes a year for 10 years would not only end homelessness, they would relieve the pressure on private renting and pay for themselves through generating new jobs and creating savings for the NHS and benefits bill.”
The statistics, released on Thursday (29 August), are the latest step in a long-running crisis.
Councils have been warning that the rising costs of homelessness threaten to push local authorities to effective bankruptcy since last year when the District Councils Network sounded the alarm.
Homelessness statistics released earlier this month showed 117,450 households were now living in temporary accommodation in England, up 12.3% in a year.
There was also a 14.7% increase in the number of households with children living in temporary accommodation, rising to 74,530, meaning 151,630 kids are now growing up homeless.
Earlier this month, Eastbourne Borough Council, which has led a year-long campaign lobbying the government on the issue, said it is facing extensive cuts to services due to the “colossal financial pressure” from the crisis.
The local authority has already slashed £3m from its 2024/25 budget and plans a further £2.5m of savings but is still at risk of being unable to set a balanced budget.
The council said it is spending £4.5m on temporary accommodation – the equivalent of 49p in every £1 it collects in council tax.
Councillor Stephen Holt, leader of Eastbourne Borough Council, said: “The new government must address this social and financial crisis as a matter of the utmost urgency.
“The spiralling costs mean that councils across the UK, including Eastbourne, are having to make extensive cuts to the services that our most vulnerable residents rely on.
“The situation is wholly unsustainable and without rapid intervention by the government, more and more councils will face effective bankruptcy.”
Cllr Claire Holland, housing spokesperson for the LGA said: “The shortage of affordable housing means that more and more people are having to turn to their local council for support and these figures worryingly show councils are spending vast sums supporting a record-high number of households living in temporary accommodation.
“The temporary accommodation subsidy gap, currently stuck at 2011 levels, needs to be urgently addressed as this is driving ever higher-spend on temporary accommodation and limiting the resources available for homelessness prevention. The government’s ban on ‘no-fault’ evictions, which are driving rising homelessness rates, also needs to be brought forward as quickly as possible.
“Councils want to turn the tide of rising homelessness. A genuine cross-departmental approach to tackling this crisis, as part of a long-term government strategy, is key with councils given the powers and resources needed to address the national shortage of affordable housing.”
Prime minister Keir Starmer warned earlier this week that the October Budget would be “painful” as the government continues to blame its Tory predecessors for a £20bn financial black hole – a claim which the opposition party denies.
Matt Downie, chief executive of homelessness charity Crisis, said the government must give councils more funding and invest in housing benefit to unfreeze local housing allowance rates in order to deal with the issue over the coming months.
“It is unfathomable that councils are spending billions on keeping households homeless in often damp and mouldy temporary accommodation instead of on new homes, all because of a decades-long failure to build the social housing we need,” said Downie.
“What can’t be quantified is the human cost of homelessness. It strips people of their dignity, it damages their health, and traps people in a spiral of anxiety and insecurity. We cannot let this continue.
“To help councils plug this financial blackhole and turn the tide on homelessness, it’s critical the new Westminster government takes a different approach and looks at more sustainable solutions.”
Current forecasts indicate that homelessness is likely to get worse before it gets better, according to analysis from the National Audit Office released last month.
Christa Maciver, head of research, policy and communications at temporary accommodation charity Justlife, said the crisis must be a priority for the new cross-government homelessness unit.
“These statistics are the latest indictment of our current approach to temporary accommodation. Increasing demand for statutory services, combined with a reduction in central government funding and rampant inflation, is a hotbed for potential local authority bankruptcy,” said Maciver.
“The ruined lives of people stuck in temporary accommodation are the collateral damage in a system that is deeply flawed on multiple fronts. We need a radical reduction in the use of temporary accommodation and an assurance that when it is used, it is appropriate to the needs and circumstances of homeless households.
“With homelessness statistics continuing to reach record-breaking heights, we urge the government to intervene by announcing plans for the new cross-government homelessness unit imminently and providing the necessary financial support to ensure our councils can weather the storm.”
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