The inside story of how Tony Blair's New Labour all-but ended rough sleeping

One day former Labour minister Hilary Armstrong might have been blowing up a tower block or bollocking a council leader. The next, her driver might take her to, say, a hostel in Vauxhall, booze flowing, home to dozens of rough sleepers finding their way off the streets.

“While I was in there, one of them had come out and lamped, with a bottle, the driver,” Armstrong says. “I get back in the car and the driver says nothing, and I suddenly notice he’s got blood coming down his face.”

“Oh, somebody came out and hit me with a bottle,” the driver said. Armstrong replied: “Right, you drive yourself to A&E now and we’ll get a taxi.”

As the minister for housing and then local government in Tony Blair’s cabinet, she found herself one of a core group tasked with ramming through one of the PM’s most passionate policies: putting an end to rough sleeping.

Keir Starmer’s Labour Party is on track to be in government by 5 July. But its election manifesto contains no firm pledges on rough sleeping. Instead, Starmer has promised a cross-government strategy, working with mayors and councils to “put Britain back on track to ending homelessness”. 

By contrast, four years into government, Blair’s team had declared mission accomplished, with a count of 532 people on the streets, a reduction of two-thirds. Compare that to now: the most recent statistics show, in London alone, 11,993 people were seen sleeping rough in 2023/24, a number up 58% in a decade.

The Conservative government promised to end rough sleeping entirely in its 2019 manifesto – but has ended a parliament with numbers increasing. The country came close during the Covid-19 pandemic, when “Everyone In” saw hotels and hostel spaces used to get almost all rough sleepers off the street. In something perhaps short of a coincidence, Louise Casey is credited as the driving force behind this – more on her later.

In interviews carried out in the lead-up to the election campaign, the Big Issue spoke to those at the heart of making it happen, from housing ministers to a grassroots worker running a hostel. What lessons are there for an incoming government? And for a state that often seems paralysed and unable to act, a more basic question: How do you get things done?

‘We were at the beginning of a new government. We wanted things to work’

“Nobody’s blowing anything up these days,” Armstrong tells me in a House of Lords tea room. When Armstrong entered her post, as a member of Tony Blair’s cabinet following his May 1997 landslide, she found herself reducing blocks to rubble in Sheffield, Brighton and the North East. “They weren’t fit for purpose,” she says. 

Homelessness was an increasingly visible problem by 1997, epitomised by London’s Cardboard City encampment, home to around 200 people on land outside Waterloo Station now occupied by an IMAX cinema. Blair’s government inherited a social housing sector depleted after years of Right to Buy, with insufficient funds available from sales to replace lost stock. Yet there was a sense of optimism. “We were at the beginning of a new government, so we wanted things to work,” says Armstrong. With a past working as a youth community worker, the role was her “bread and butter”.

The Labour 1997 manifesto decried young people sleeping rough on the streets as the most “powerful symbol of Tory neglect in our society”, but did not include a firm target on homelessness. Soon, work began on something more concrete. By December 1997, Blair established the Social Exclusion Unit. Its first report, published in 1998, led to the creation of a ministerial committee on rough sleeping, chaired by Armstrong, aiming to get ministers from different departments working together to tackle the problem.

But it was 1999 when momentum gathered. April saw the new Rough Sleepers’ Unit (RSU) replace the existing Tory-era Rough Sleepers Initiative. Armstrong was replaced as housing minister by Nick Raynsford, but continued as minister for local government. By September the RSU had assumed responsibility for policy. Finally, in December 1999, there was a target: reduce rough sleeping by two-thirds by 2002.

Critical to this, say those interviewed for this story, was the appointment of the woman to lead the Rough Sleepers’ Unit: Louise Casey.

‘She was tough love personified’

Now known nationally as Baroness Casey for her damning post-Sarah Everard report on misogyny in the Metropolitan Police, at the time Casey was in her early 30s and at the start of a remarkable career, working her way up through homelessness charities.

“She was tough love personified, was Louise, and that’s what we felt we needed,” says Armstrong. Nick Raynsford, who replaced Armstrong as housing minister in 1999, called her appointment – from outside government – “a bit of a one off”, and “brilliant”.

“To be fair, at times Louise could be quite abrasive, and local authority chief officers got their noses put out by feeling they weren’t being listened to and respected,” Raynsford tells me over a lunch of Caesar salad and claggy goat’s cheese in Central London.

“That’s probably too harsh – she wasn’t deliberately difficult, but she was tough, and rightly so, and was very clear she had a mission to deliver and needed to do so.”

Casey, who is rumoured to be in line for a post with Keir Starmer’s government, did not respond to requests for an interview. She said in August 2023 she is “100% behind Keir Starmer”, and, if given free rein, would work out a plan to end hunger and reform the rental sector to end homelessness.

The plan to hit the 2002 target was complex. It involved outreach teams heading out into the dark every night, and an unprecedented level of data on how many beds were available, and how detox was going. Money was poured into extra bed spaces and hostels, while ministers from different departments were made to work together.

Most of the work was to be done in London, where rough sleeping was most prevalent. But other hotspots included Birmingham, Bristol and Brighton. Local authorities were given targets, negotiated with Casey’s RSU.

It was hands-on work – alongside Armstrong’s eventful hostel visit, Casey’s role involved a trip to a barracks in Catterick, where she did training for what they needed to do before kicking people out. Local authorities were held to account, with plenty of “knocking heads together”, as Raynsford recalls. Leaders of underperforming councils would be called in for a dressing down at Westminster, but there was also the carrot of being held up as an example.

Ministers, in Raynsford’s words, were responsible for “not accepting the kind of lame excuses that were often offered by local government and by homelessness agencies”.

For those working at homelessness charities, “there was a much greater accountability, a much greater pressure: ‘You’ve got this funding, you’re meant to deliver this, what are you doing about it?’” says Adam Rees, who ran homeless hostels during the time. Services became more professionalised.

At its heart was a move from bringing people off the streets temporarily, to actually fixing their problems and intervening in their lives. “There was a real determination that you couldn’t work with people on the streets effectively. There were too many issues for them. There was the fear of people around them, but there was also you couldn’t get them help, couldn’t get their feet seen to, their teeth seen to,” says Armstrong.

“We wanted to have a different view of how you help the homeless. You actually treat them as like yourself.”

Crucial was buy-in from the top of government. “John [Prescott] came and did the breakfast the first morning, and every bleeding television company from around the world came in to video it,” Armstrong adds. “But the key thing was that if the prime minister and the deputy prime minister wanted it to happen, then everybody else in government saw it as a priority.“

‘It was a more accepting regime’

One place Louise Casey would pop up was hostels, sometimes with a client, saying “this person needs to be accommodated”, says Rees. Civil servants could turn up for shifts with outreach teams, asking questions and making observations.

While running a shelter in an empty central London office building, Rees saw the change in approach first-hand. This meant that, rather than shelters and hostels being a place to get people off the streets for a night, or while it was cold, people were there to be engaged with.

There was a sofa in the reception of the hostel, where clients would sit and have a quiet drink. “I still remember sitting down and talking with people who’d come in off the streets, who had been many, many years on the streets, and had been able to get inside because it was a more accepting regime,” says Rees. Often, these would have been people ignored or patronised by the system before. Instead, they were seen in the round, and work was done to address the reason they were on the streets.

“One of my abiding memories is just how many people moved through and went on to recover and live independently.”

“I don’t think, I would say, ministers or Louise Casey came into it having a very clear idea of the end point. I think they were learning as they went, they were seeing what worked,” but perhaps a good thing.”

‘I wanted it to be wider’

Nick Raynsford’s radicalisation came during the 1970s. His anger grew over the Centre Point saga, where an office block in central London was kept empty to maximise its value to the owner. “A giant ponzi scheme”, he says. With a mind for the finer details of housing policy, Raynsford had expected to become housing minister when Labour came into government, but found himself with a two year wait.

“On housing I’d set out the agenda, and that was broadly followed when we came into government, so there wasn’t any change of policy.

With a policy in motion, Raynsford  “wanted to embed it in a wider housing policy approach. Rather than it being seen as a separate arm of government dealing with homelessness, I wanted it to be part of the wider.”

This push brought in the Homelessness Act 2002, requiring all authorities to make a new homelessness strategy every five years. Priority need status was extended. Supporting People Programme launched in 2003, £1.8b in funding to help local authorities fund services for people to live independently.

‘Will you stop them doing all these soup runs?’

Visits on cold nights out often produced surprising insights. “I went to the back of the Savoy, and they worked out there’s something going on, so they had their spokesperson come to talk to me,” recalls Armstrong.

“And he said, ‘Look we’re alright with the first soup run, but after that they’re a nuisance. They come and wake us up and then they leave us sandwiches and things, but we’ve already eaten. So the rats come. So will you stop them doing all these soup runs?’ 

“That was another thing. It was basically saying to good-hearted people, there were ways we can engage with you to work with the homeless that don’t keep them trapped on the streets.”

This was one big change of approach, and a hard sell. “It wasn’t saying we want to leave rough sleepers to starve, it was saying we want them no longer to be rough sleeping, we want them inside, and we want to have places where they can eat indoors,” says Raynsford.

By August 2001, ahead of the originally slated 2002, it was clear the target would be hit. The number of rough sleepers had been reduced from around 1,600 to the mid-500s.

“It was a great achievement, really pleased, but recognised you’ve got to keep at it. Otherwise it will slip back,” says Armstrong of her reaction. “On the other hand, it was a real feeling of ‘this can be done’, and none of us can have any excuses any more”.

The policy has a long shadow today. As mayor of London Sadiq Khan unveiled his own pledge to get people off the streets for good in April 2024, he said “rough sleeping was all but eradicated” by Blair’s New Labour government. In reality, it was reduced by two thirds in 2001. This target also came with criticism – that street counts were a fudge, where the true scale of street homelessness could be obscured for the night of the count. 

Both Raynsford and Armstrong rejected this when I asked about it. “We worked on that,” says Armstrong. “We used all the voluntary sector on doing it, and they didn’t have any interest in conning people,” Armstrong says. Raynsford puts it down to the views of academics.

“These are people who are unsympathetic to New Labour, who basically want to say ‘this was New Labour doing this to give a good impression to business that the streets were being swept clear of people rough sleeping to avoid upsetting the tourists’. It was absolutely none of that,” he says. 

“It was very much focused on, we need to get people off the streets because it is dangerous, it is unsafe, unhealthy for people to live on the streets and we want to get them into accommodation, to give them a chance to turn their life around, not to be doomed to an early death in a pretty unpleasant context. I reject entirely that analysis.”

With Labour’s rough sleeping target hit, the RSU was rebranded. Louise Casey got a new role tackling anti-social behaviour. Armstrong became chief whip and Raynsford became minister for London – finding himself in charge of emergency planning exercises in the wake of 9/11.

Over the next two decades, homelessness rebounded. Along with the obvious spectre of austerity, Armstrong found a Conservative government unwilling to cooperate, recalling being barred from one meeting with a new minister.

“Of course what happened was rough sleeping just got worse and worse and worse. They wouldn’t learn and listen to anything people like me were saying. It was ridiculous. That’s one of the things you cannot afford,” she says.

Much of the success can be put down to things which largely don’t exist now: mass funding, proper political will, available accommodation and well-resourced public services.

For those who made it their mission for years, the turnaround leaves a bitter taste. “I’m very sad,” says Raynsford. “And I’m very angry, actually. I’m angry at the disgraceful behaviour of ministers who promise to do things and don’t deliver, and who stigmatise the homeless.”

Reports suggest Starmer’s efforts to fight rough sleeping will be led by Labour’s deputy leader Angela Rayner, who, barring a spectacular polling failure, is in line to become deputy prime minister. But Armstrong is keen to point out the importance of the head honcho.

“It has to be a cross government commitment. And it has to be one that the person at the top wants to happen, and shows an interest in, and makes sure that people are accountable. If you do that, then it’s possible to do it,” she says.

Says Raynsford: “We were perhaps a bit naive, we came into government and thought we could make big changes. And we did. Sometimes the problem with people coming into government is they’re a bit unambitious.”

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