Giving homeless people stable housing could save taxpayer £200m a year – if Labour wants to

The Labour government has been urged to roll out a national Housing First programme to reduce growing rough sleeping across England and save the Treasury £200 million over the next five years.

Housing First is a model of tackling street homelessness that gives people a permanent home as a foundation and then offers intensive support to help them keep it with help for beating addiction, mental health issues or to move towards employment.

New analysis from the Social Market Foundation (SMF) found that a national rollout of the programme to cover an estimated rough sleeping population of 11,200 people would generate net fiscal benefits worth £195m. 

The savings comes from reducing the costs of homelessness, including contact with the criminal justice system and anti-social behaviour.

The Housing First model has received much acclaim for its role in tackling homelessness in Finland. Three government pilot schemes have been running in England since 2018 and the Manchester, Liverpool and Birmingham schemes have seen 92% of rough sleepers in long-term accommodation after a year.

The think tank said the Labour government should allocate £44m per year for local authorities to provide Housing First based on the model used in the existing pilots.

Gideon Salutin, senior researcher at Social Market Foundation, said: “This briefing is an attack on those who argue that ending rough sleeping is unrealistic, and on recent policies which failed to decrease it.

“In reality, rough sleeping is amenable to rapid reductions – so long as it is taken seriously. This briefing provides a cross-government agenda that, if rolled out nationally, could drastically reduce the numbers of rough sleepers – and save taxpayers up to £200m a year.”

The think tank also said the government should appoint a Housing First director to lead a team with the capacity and resources to advise local governments on best practices.

That call comes just days after Labour confirmed Birkenhead MP Alison McGovern as the new homelessness minister. The role had been vacant for 40 days after Rushanara Ali’s resignation over a rent hike scandal.

There is a growing clamour for an increased investment in Housing First and McGovern’s first few days in the job prove it. She has already faced questions from Labour MPs Lee Pitcher and Alison Gardner on whether the government is seeking to roll out a national programme alongside its upcoming long-term homelessness strategy.

McGovern declined to answer directly and said in response: “The Rough Sleeping Prevention and Recovery Grant (RSPARG) is providing a total of £185.6 million to local authorities across England in 2025-26.

“The RSPARG gives local authorities the flexibility to determine the most suitable rough sleeping services required to meet local need, including support to housing first projects.”

Read more:

• Housing First is a success in other countries – so why can’t we make it work in the UK?
• This housing project claims it could save Labour millions on housing asylum seekers in hotels
• This project offers homeless people a home for life: ‘We want to end homelessness one person at a time’

SMF are not the only ones calling for an increased investment in Housing First as rough sleeping has risen in England.

There are now a record number of people on the streets in London while the official rough sleeping snapshot found 4,667 people were sleeping rough on a single night in autumn 2024, representing a 20% increase on statistics from the previous year.

Back in July, the Centre for Social Justice think tank also called for a similar targeted expansion of Housing First in England to deliver 5,571 places by 2029-30. 

In response to that report, Greater Manchester mayor Andy Burnham, who has rolled out a Finland-inspired Housing First philosophy across the region, said: “The Labour government was elected on a promise to end sticking plaster solutions. Housing First is exactly that: a long-term, ambitious, and transformational policy that works to end homelessness for the vast majority of people supported by it.”

While the Housing First model has been more widely adopted in Wales and Scotland, progress has stagnated in England, according to Homeless Link’s Housing First lead Alex Smith.

“We still want to see that long-term ambition that’s been a 30-to-40-year endeavor in Finland. We’re nowhere near that,” Smith told Big Issue.

“I think where we’re at is really just trying to keep the momentum and the motivation up around Housing First rather than this big systems transformation. It’s actually: are we in danger of losing Housing First altogether? Let alone it being a catalyst for broader systemic transformation. I think that’s kind of where we’re at. 

“At the moment, we don’t really have a sense of if or how Housing First might feature in the upcoming strategy. And what we have seen is actually Housing First has started to roll back a bit. I think there’s an issue of whether there is political will or commitment to Housing First. I think we’re stable at the moment, but beyond March of next year I feel very uncertain about what’s going to happen.”

Smith added: “At Homeless Link, we are clear that Housing First is a successful and cost-effective approach to supporting people with some of the most complex needs to escape rough sleeping and should form a core part of the forthcoming homelessness strategy. Without it we will struggle to end homelessness for all.”

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