English councils’ temporary accommodation bill rises to £2.8bn

Of the total spend, £1bn went on nightly paid, self-contained accommodation. This type of privately managed accommodation means residents do not have to share a bathroom and kitchen.

This use of this type of housing is growing as spend on this soared by 79% last year. But while it is more private, it is the most expensive, and housing charity Shelter said some families are living in a room that can be “just as cramped” as B&Bs. 

One third of the total temporary accommodation bill – £844m – was spent on emergency B&Bs and hostels, which is the least suitable form of housing for families as they have to share kitchens and bathrooms with others.

The spend on emergency B&Bs and hostels is up from £780m last year. However, the latest homelessness statistics from the first quarter of 2025 showed that the use of B&Bs for families is falling.

The data showed that 7,480 families were recorded as living in B&Bs or hostels in England at the end of March 2025, a decrease of 16% since the end of March 2024.

But councils, which have a legal duty to provide temporary accommodation to homeless households qualifying for support, are still spending huge sums on temporary accommodation.

A recent report by London Councils warned that a £330m overspend on homelessness services is the “single biggest risk” to their finances.

Meanwhile, the cost of providing temporary accommodation has left many councils struggling to deliver public-facing services such as libraries, maintaining parks or fixing roads, according to a report published by the Housing, Communities and Local Government Committee.

Mairi MacRae, director of communications, policy and campaigns at Shelter, said: “While the housing emergency is draining billions in public funds, families across the country are paying the ultimate price. Money that should be helping them into a secure home is, instead, shelled out on grim temporary accommodation, just to keep people off the streets.”

Shelter called on the government to ramp delivery of social housing to 90,000 a year by setting a “clear overall target” for the delivery of social rent homes. 

John Glenton, chief care and support officer at housing association Riverside, said: “Spending £2.8bn a year, and more than £10bn over five years, shows the immense and unsustainable cost councils are facing.

“However, this spending does not show the immense toll that living in temporary accommodation has on families, who are often forced to share beds and live in one single room without kitchen facilities, leaving families deprived of sleep and the ability to make a warm, healthy meal.”

Tom Hunt, chair of the inclusive growth committee at the Local Government Association, said: “Councils need changes to the way that government reimburse them for temporary accommodation costs.

“Current housing benefit reimbursement rules for temporary accommodation are outdated – councils must pay landlords according to current market rates, while reimbursement for councils is linked to 2011 rental rates.

“This needs to change and government needs to act, specifically by making the rate the current rate, as opposed to one that’s 15 years old, as well as restoring the Local Housing Allowance rates to at least the 30th percentile of local rents beyond 2025-26.”