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London boroughs considering establishing temporary accommodation joint company
Councils in London are working on plans to establish a joint company to source temporary accommodation for homeless households.
The not-for-profit vehicle would aim to help boroughs work together to procure homes from the private rented sector for use as temporary accommodation, in a bid to cut down on costly and unstable nightly accommodation such as B&Bs.
The Ministry of Housing, Communities and Local Government (MHCLG) has agreed in principle to fund the project with £39m over three years from its Flexible Homelessness Support Grant, pending final sign-off.
According to a report due to go before the executive of umbrella group London Councils next week, the draft plan for the new company is being finalised.
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Around 10 boroughs would pilot the proposals initially, with other councils able to join later on a voluntary basis.
If the plan goes ahead, the company will take on specialist temporary accommodation staff from town halls to agree private tenancies with landlords. Councils would then pay a ‘procurement fee’ to the company, subsidised by the MHCLG funding.
It would also act as a private landlord on leased accommodation, with rent covered by Local Housing Allowance.
Local authorities would have the option to pay the company a management fee for these properties or manage them directly.
A ‘tenancy sustainment and landlord liaison team’ would work to help iron out issues between tenants and their private landlords, with the hope this would increase the number of landlords willing to let their properties through the company.
The company is expected to start trading by early next year.
Nearly 79,000 households were in temporary accommodation at the end of 2017, an increase of around 60% since 2010.
Of these, 54,370 were in the capital. London Councils research found that the capital’s local authorities spent £663m on temporary accommodation in 2014/15.
Local authorities in London are also collaborating on separate plans to set up a company which will build modular housing for use as temporary accommodation.
The Greater London Authority estimates that councils in the city will need to find 50,000 more tenancies for homeless households over the next four years to meet need.
In addition, from April local authorities were given extra duties to house people at risk of homelessness or rough sleeping under the Homelessness Reduction Act.
London Councils has previously warned that boroughs will need to spend £132.7m carrying out these duties in 2018/19, while government has given them just £11m in new burdens funding.
