“We urge the chancellor to listen to the immense, cross-party strength of feeling in local government – unless money is found our services will be decimated, suffering will increase as more people fall into homelessness and other parts of the public sector will be left to pick up the pieces at huge cost.”
Rising homelessness as households have struggled to keep pace with the cost of living crisis has seen demand for temporary accommodation grow in recent times.
Local authorities have also been facing additional pressures from refugees reporting as homeless after arriving from Ukraine and Afghanistan while Home Office efforts to clear the asylum backlog have sparked warnings of a surge in homelessness in parts of England.
Councils wrote to the chancellor following the summit, urging Jeremy Hunt to provide £100m in additional funding for discretionary housing payments in 2023/24 and an extra £200m the following year to deal with rising pressures. Discretionary housing payments allow people who receive housing benefit to receive financial support to cover rent shortfalls, deposits and rent in advance.
Councillors also called for a £150m top-up to homelessness prevention grant funding as well as plans to improve the supply private rented housing and long-term funding to increase the supply of social housing.
Like The Big Issue’s End Housing Insecurity Now campaign, councils want chancellor Hunt to raise local housing allowance rates to help tenants keep up with rising rents.
Raising the cap for housing benefit subsidy rate for local authority homelessness placements would also help to deal with the temporary accommodation crisis, councillors said.
A government spokesperson told The Big Issue local authorities have seen an increase in core spending power of up to £5.1bn in 2022/23.
“We are committed to reducing the need for temporary accommodation by preventing homelessness before it occurs in the first place, which is why we are providing councils with £1 billion through the homelessness prevention grant over three years, the government spokesperson added.
Eastbourne Borough Council, who hosted the summit alongside DCN, said that local authority had to find an additional £2.6million to cover the temporary accommodation bill in 2022/23 and expect the figure to rise to £3.6m in 2023/24.
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Councillor Stephen Holt, leader of Eastbourne Borough Council, said: “Today we heard from councils and social housing experts, and we are all arriving at the same conclusion.
“The collapse of support for society’s most vulnerable people is now a reality for many, unless the government urgently intervenes. This summit be a catalyst for change and that change cannot wait.”
Meanwhile, county councils are also sounding the alarm. The County Councils Network (CCN) warned of a £4bn funding deficit over the next three years with one in 10 councils unsure they can balance their budget thus year. Six in 10 councils are not confident they can balance the books in 2025.
Barry Lewis, CCN vice chair, said: “Unless we act now, this analysis shows that other well managed councils are running out of road to prevent insolvency.”
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The financial pressure on some county councils is forcing them to consider scrapping non-statutory homelessness services.
Kent County Council previously chose to scrap homelessness services in the face of increased financial pressures but Devon County Council paused plans to do the same earlier this year after warnings that it could lead to surging rough sleeping in the county.
Leicestershire County Council is the latest local authority to consider similar cuts.
The council’s Health Overview and Scrutiny Committee will discuss proposals to cease funding a dedicated homelessness support from April 2024 on Wednesday before the cabinet makes a formal decision on 24 November.
Falcon Support Services and Nottingham Community Housing Association currently deliver services under the contract. The people behind the Falcon Centre, which provides 30 bed spaces at any one time and supported 99 people in 2022/23, would have to close its doors. The council told The Big Issue the contract is intended to help people maintain tenancies rather than providing bed spaces.
Rachel Hall, deputy chief executive at Falcon Support Services, said: “Without the money to fund support staff, the centre will have to close its doors. Tragically, most of the people we currently house will tragically return to sleeping rough at a time when homelessness in the county is already rising sharply.”
A total of 15 organisations, including local charity Action Homeless, the Hinckley Area Foodbank and Homeless Link, have written to councillors calling for a U-turn, warning the move would “further entrench health inequalities within the county”.
Peter Smith, director of sector development at Homeless Link, said: “Prolonged inflation and historic under-funding mean Leicestershire County Council, like local authorities across the country, is facing huge pressures to find savings in its budgets.
“But cutting homelessness funding is a dangerous and short-sighted decision. Not only will it cause a rise in rough sleeping, it will also be placing additional strain on valuable health and social care services, meaning the proposed savings represent a false economy.”
Councillor Louise Richardson, Leicestershire County Council cabinet member for health and wellbeing, said: “We can’t be a provider of last resort. Whilst in an ideal world we would like to continue discretionary funding for such services, we are facing increasing financial pressures with our budget shortfall now well over £100m by 2027.
“Tough decisions need to be made. Our support helps people across the whole of Leicestershire and our proposed new model is expected to help more than 2,500 people from every part of the county.”
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