A smarter approach to homelessness

Rather than providing permanent homes, the system keeps families with young children in temporary accommodation at a cost that can easily be £30,000 a year per family, or more, with social costs even higher than that, thanks to knock-on effects on education and health.

But even as they try to book temporary accommodation, councils can find companies acting for other parts of the government looking for accommodation for asylum seekers and prison leavers outbidding them.

Despite evidence that prevention costs many times less, cash-strapped local authorities are forced to “retreat to short-term reactive responses in fulfilment of their immediate legal obligations, despite their often exorbitant cost”, raiding prevention budgets to pay for it. 

Structural barriers, most obviously a lack of social housing, block progress, while the system creates “perverse incentives” that “actively encourage inefficiencies and poor outcomes”. 

“Despite evidence that prevention costs many times less, cash-strapped local authorities are forced to ‘retreat to short-term reactive responses’”

As the latest homelessness statistics show, the number of families experiencing homelessness and children in temporary accommodation was still rising in the fourth quarter of 2024.

The use of bed and breakfasts did at least show a second consecutive monthly fall, but the number in nightly paid accommodation is still rising, and there are eight times as many out-of-area placements as when Labour was last in government.

The report argues that “two foundational pivots” are needed.

First, the Treasury should make it clear that it will prioritise investment in “upstream prevention work” rather than high-cost reactive spending.

Second, the government should set the expectation that tackling homelessness is not the responsibility of the housing ministry alone, “but is a responsibility and requirement shared across all arms of the state”. 

These would be a huge shift in the way the Treasury and Whitehall operate.

We will find out soon whether these kinds of arguments have worked, but Westminster would also do well to lift its gaze beyond England. Here, despite positive moves such as the Homelessness Reduction Act 2017, progress remains far behind Scotland and Wales.

Both the Labour government in Cardiff and the Scottish National Party administration in Edinburgh have committed themselves to making homelessness rare, brief and unrepeated. They have progressively strengthened their homelessness legislation and enshrined a preventative approach.

The Housing (Scotland) Bill currently going through the Scottish parliament will introduce an ‘ask and act’ duty on social landlords and key parts of the public sector, including health, police and the prison service, to ask about a person’s housing situation as soon as possible and act to avoid them becoming homeless.

“Westminster would also do well to lift its gaze beyond England. Here, progress remains far behind Scotland and Wales”

And, last week, the Welsh government introduced a Homelessness and Social Housing Allocation (Wales) Bill that it says will “fundamentally change our homelessness system” so that it is focused on prevention (exactly as advocated in the report for England).

Alongside a similar ‘ask and act’ duty, it will abolish the priority-need and intentionality tests, modify the local-connection test, extend the prevention period from 56 days to six months, and give homeless applicants a right to a review of decisions taken about their case.

The bill also gives local councils a new power to request social landlords “make an offer of suitable accommodation in their area for a specific applicant owed the final homelessness duty”. Social landlords must comply unless there is a good reason not to.

There has already been considerable debate about these issues, with local authorities concerned about resources for implementation and housing associations worried about the new power over allocations.

Will passing the bill act like a magic wand? Probably not. Homelessness and temporary accommodation are still significant problems in Scotland and Wales.

Both nations, though, are way ahead of England, taking a smarter approach to homelessness and setting a benchmark for the English housing ministry.

However, strategies and legislation can only take us so far: turning them into reality depends on decisions taken at a UK level by the Treasury in the Spending Review.

Jules Birch, columnist, Inside Housing