The carousel of homeless funding as experienced by one Leeds service

TLA is one of many organisations trapped in a loop of short-term contracts that is commonplace in the “broken funding system” for homelessness services, according to Reset Homelessness Campaign, a campaign between Inside Housing and Homeless Link asking for a fundamental rethink of how such services are paid for out of the public purse, we are in Leeds to see how this uncertainty affects TLA and the people who depend on it.

Complex needs

We meet Emma Wood in the foyer of Leeds City Council’s main office. She is the pathways manager for Beacon, a service for homeless individuals and families who have multiple disadvantages that includes the Grace Lodge hostel. It is run by TLA in a consortium with Touchstone and Foundation, two other Leeds-based charities.

We meet Sian* outside a shopping centre. She is carrying a large rucksack and sleeping bag, but becomes distressed and angry as Ms Wood approaches. She had been beaten up after pitching her tent in a park, she shouts before walking off. Sian had been asked to leave her last shared accommodation after being abusive to another tenant, Ms Wood explains.

“She needs a different type of offer, and it is not clear what that is,” she says.

As we go to the town hall, Ms Wood describes the rise in rough sleeping she has seen in the city. “It’s almost doubled. It’s gone from around 40 a few years back to high 70s in the last headcount, and that is not a true reflection of the actual figures. There are people who weren’t seen in the last count that we know have not got accommodation,” she says.

Ms Wood’s role includes managing clients’ housing needs assessments and processing referrals from Leeds City Council or street outreach teams to Beacon’s hostels, which the charity calls intensive support environments. 

“We try and stabilise their often-chaotic lifestyle, as they are often coming straight from the streets or from other emergency accommodation providers,” Ms Wood says.

When the temperature dips below zero and the SWEP is triggered, Beacon must quickly find beds for more rough sleepers, irrespective of their official housing status. Staff members then face the “heartbreaking” task of asking them to leave when the weather warms up, says Ms Wood.

“You have to tell them to go back down to housing services, where they will likely sit for six hours and be told to find some private rented or alternative accommodation. The temperatures might have increased, but it’s still awful to be out there in any weather,” she says.

At Grace Lodge, we meet Mike*, who has been homeless on and off since leaving the army in 2006. Mike has also been in prison, suffers from post-traumatic stress disorder from his time in the Armed Forces, anxiety and depression. He has been put in a separate room, as he struggles to keep off drugs when in the company of the hostel’s other inhabitants.

“Being here in this accommodation for too long is not helpful,” says Abby Goater, scheme manager for Grace Lodge and two other hostels.

Like many of Beacon’s clients, Mike has been through Leeds City Council’s homelessness system multiple times. He feels he is “back to square one” after losing a two-bedroom flat where he had been a victim of ‘cuckooing’ (where drug dealers take properties over for dealing). Staff members say it is a growing problem in Leeds, and we later meet another client at the hostel who had also been cuckooed.

“I got introduced to a dealer and he asked me if it was all right to weigh up drugs in the house,” Mike says.

“I agreed and he started feeding me crack every day. One morning, he wanted me to go and do a delivery. I fell back to sleep and he started beating me up and put a gun to my head. That’s when I left,” he says.

People are supposed to stay in Grace Lodge for up to four months before moving into one of the 200 bed spaces TLA leases from housing associations or private landlords across the city. More are urgently needed, and the shortage means some hostel stays last two years.

The council outsourced the city’s homelessness support services to charities such as TLA some years ago, leaving these services reliant on contract renewals and extensions to keep going. Two weeks after Inside Housing’s visit, Mr Hoey emails with the news that all of TLA’s contracts have been renewed. However, there is an all-too-familiar caveat of “uncertainty about contract values after 2025-26”. And so the cycle continues.

The delay this year was due to TLA’s council commissioners being stuck themselves. They had to wait for the government to announce its allocation of core grants, such as the Homelessness Prevention Grant. In Leeds, this has risen from £2.6m in 2024-25, to £6.1m for 2025-26. It is part of a national funding package for homelessness and rough sleeping services worth nearly £1bn that the government announced at the end of last year. But this settlement only covers 12 months. In the meantime, TLA and many other charities cannot look far beyond the next year.

“Short-term funding cycles from central government are unhelpful, because we often can’t plan more than a year ahead, making recruitment and retention very difficult,” says Mr Hoey.

The Ministry of Housing, Communities and Local Government declined to comment. But it has promised councils a multiyear financial settlement from 2026-27 to give them greater certainty in their budgets.

Impact on staff

Mr Hoey joined TLA in 2022 when it was running at a £439,469 loss. After securing extra funding from Leeds City Council and what he calls a “saving sprint”, it is now £410,362 in surplus. He wants to reduce TLA’s reliance on local authority funding, which forms 98% of its income. However, he admits it has been an uphill struggle.

TLA’s £7m turnover puts it above many potential funders’ eligibility criteria, and even successful grant applications are often awarded on a short-term basis.

“Short-term funding cycles from central government are unhelpful, because we often can’t plan more than a year ahead”

Mr Hoey points to a TLA-run Housing First project for sex workers, which was initially funded for three years by The Henry Smith Charity, a grant-making trust. Once the three years were up, TLA began closing the service down, only to secure an extra 12 months of funding from Henry Smith, which meant it could gear up again.

“We’ve still got the problem of what we tell these women at the end: ‘Sorry, you’re going to have to cope now with less support,’,” Mr Hoey says. While an extra year of support is “better than not doing it”, the time-limited funding is a “real issue”, he adds.

Stop-start funding can be detrimental to clients, especially for models like Housing First, which are supposed to offer open-ended support and permanent accommodation.

This effect was highlighted by the Homeless Link report, which warned that closed-door systems can “re-embed the traumas of homelessness”. Even when services continue running, they are often “delivered in precarity, with an unstable workforce and uncertainty about the future”, the report says.

Mr Hoey says support staff also face more challenges, as the number of people with “complex” problems in the city increases. “The majority of people turning up to services like this are homeless and traumatised; they often have drugs and alcohol issues, usually have mental health issues and sometimes have an offending background,” he says.

Financial pressures are forcing many other services accessed by the people TLA supports to scale back, such as social care and probation. Leeds City Council alone faces a budget shortfall of more than £273m in the five years to 2029-30, it announced last year.

Back at Grace Lodge, Ms Goater says the challenge of difficult cases and the stop-start nature of short-term funding have a “massive impact” on staff numbers and workloads. “The trauma that staff are picking up working with such tough-going cases impacts us with sickness,” she says.

While hostels like Grace Lodge, other TLA services and similar ones across the country offer a lifeline for rough sleepers, the funding regime makes staff feel like they are firefighting.

“The way this service is commissioned is very difficult. It’s not knowing how long the service will be available for and what happens next,” Ms Goater says.

*Names have been changed