How councils cutting homelessness funding could be damaging their communities in the long run

Prevention is better than the cure. It’s an old adage but it certainly rings true when it comes to homelessness.

The issue is expensive for the taxpayer, expensive for society and expensive on a human level. A single person rough sleeping costs thousands of pounds over a year and the trauma can have life-long effects.

But for cash-strapped councils looking to balance budgets, investing in preventing homelessness beyond statutory requirements has become a luxury some can no longer afford, even if it costs them more in the long run.

Devon County Council is currently holding a consultation, which closes this week, on whether to axe homelessness prevention funding to save £1.5m a year.

The Tory-run local authority said it does not have the cash to continue funding the support for 250 people, despite its own impact assessment warning five hostels around the county may have to close. The move has been blasted as “short-sighted” by local Lib Dem MP Richard Foord.

Si Johns, the joint-chief executive of YMCA Exeter, told The Big Issue people will die if the funding is cut. YMCA Exeter stands to lose £157,000 per year but estimates from the charity found Devon County Council could end up paying £1.8m a year in combined housing benefit and adult social care costs.

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A spokesman for Devon County Council said: “To prioritise spending on our statutory responsibilities to support vulnerable children and adults, the council is looking to make savings in the region of £45 million. 

“We’ve been able to help fund this support service in the past, even though it falls outside our statutory adult social care responsibilities.

“Our proposal to stop our contributions to this contract, while put forward with reluctance, would, if adopted, allow us instead to target our scarce resources to support growing numbers of vulnerable adults who are eligible for social care support. No decisions have been taken, and won’t until we’ve concluded our consultation and considered all responses.”

Devon councillors could do well to look over to Kent to see the impact of scrapping homelessness prevention funding.

Kent County Council announced the Kent Homeless Connect service would be decommissioned in September 2022. Homelessness support charities and other providers in the county are receiving 20 per cent less funding every quarter until March next year, when support ends.

That will mean services will have to close, Mike Barrett, chief executive of Kent homelessness charity Porchlight, told The Big Issue, and the inevitable result will be rising numbers of people on the street. In fact, there are signs this is already happening.

The number of people counted in the official rough sleeping snapshot in south-east England rose by a quarter in 2022 when compared to the 2021 count. The number of rough sleepers spotted rose in five of the 12 district and borough councils in Kent and stayed the same in two others.

“We’re seeing higher numbers of people on the streets and higher numbers of younger people as well, which is worrying,” said Barrett. “We’re trying to maintain some women’s services but it’s looking like they will close by the end of the year.”

Scrapping the funding has saved the council £5.3m a year, and Porchlight is set to lose £2.7m. 

The charity says the public sector will inherit costs of £8m a year once the impact on the NHS, mental health services, the judiciary and other factors are taken into account. The charity estimated that, for every pound saved, £1.59 will have to be spent to provide services that match the benefits of the service.

Add in a loss of £2m in economic value and almost £1m in social value – the benefits of reduced crime and increased safety – and the council is facing a steep cost of £11.3m from scrapping the service.

“It’s just nonsensical to lose the preventative services because they save untold amounts of money going forward,” said Barrett.

“It brings into focus another issue in Kent – and elsewhere – that rents are ridiculously high. But benefit rates are frozen and we cannot get people into anything close to decent accommodation in the private sector and the stock of private sector housing is reducing. Some people, especially around the coastal areas where some of the deepest pockets of deprivation exist, they’re going to Airbnb.

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“The dearth of social housing in Kent has always been a massive problem and it’s magnified now because there is such a shortage. But the private rented sector is not soaking up nearly as much as it was.

“We’ve always had a high proportion of people coming to our helpline who have been served Section 21 [no-fault eviction] notices and that continues apace. We’re looking at some really scary problems. It’s a pretty dire outlook. In a nutshell this is the nightmare we have in Kent.”

Kent County Council told The Big Issue “significant budget pressures” were behind the decision not to extend the Kent Homeless Connect contract when it expired last year. The local authority added that it was aiming to move services back to district and borough councils.

Richard Smith, Kent County Council’s corporate director for adult social care and health said: “The council recognises that there has been concern about the decision in last year’s budget to not renew the Kent Homeless Connect contract when it ended in September 2022.

“The council has, and continues to, face challenging times and ongoing rising cost and demand pressures due to the Covid-19 pandemic and significant reductions in government funding. Therefore regretfully, we have been faced with challenging decisions about our non-statutory services to ensure we are able to continue delivering our statutory responsibilities.

“We remain committed to continue working closely with our city, borough and district partners, providers, landlords, those who use the service and their representatives to ensure affordable and sustainable solutions to protect the most vulnerable people from becoming homeless continue.

“There are many other ongoing cross partnership initiatives providing support to our vulnerable residents at risk of homelessness which will continue to give them the help they need, and we are examining ways in which to improve on these in the future.”

The Local Government Association (LGA) has called for prevention to be at the heart of long-term planning to tackle rough sleeping after the official annual snapshot showed steep rises in people spotted on the streets. 

The LGA found relatively small amounts of council investment can lead to significant benefits to the public purse – a report published last year found local authorities accrue half of the benefits of preventing someone rough sleeping. That includes councils benefitting from not having to pay to house someone in temporary accommodation or someone moving into employment and paying back into the local economy, for example.

Councillor David Renard, the LGA’s housing spokesperson, said: “If the government doesn’t urgently develop a cross-departmental homelessness-prevention strategy in response, we can expect to see these numbers continue to rise.” 

The government is still aiming to end rough sleeping in England by the end of 2024. It is giving local councils £654m over the next two years to prevent people falling into homelessness.

But with council coffers under pressure more widely, a cost of living crisis pushing more people into poverty and a housing crisis to boot, it seems like the distance of travel is moving in the other direction.

“It will cost them more both financially and socially because communities suffer,” said Barrett in a warning to other areas considering a move away from prevention.

“If areas want to see communities of rough sleepers grow and all the associated issues that come with that then that’s what will happen. People on the street will do what they can to survive and if that means forming small communities they’ll do that.

“All of the groups historically that have had to hide because of their vulnerability, whether that’s because they are people of colour or because they’re women or because they’re very vulnerable, will be exposed.”

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