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Homelessness Reduction Act might not cut temporary accommodation spend, councils warn
Councils have cast doubt on whether the Homelessness Reduction Act will bring down spending on temporary accommodation, as expected by the government.
At a hearing of the Communities and Local Government Select Committee yesterday Sir Steve Bullock, mayor of Lewisham Council, was asked whether the act’s emphasis on homelessness prevention would save councils money.
Sir Steve said: “I hope there will be savings but I’m not sure that if we drive down costs in one area they may rise in another. It’s not clear it will bring reduced temporary accommodation costs as the DCLG thinks it will.”
Speaking at the same hearing Marcus Jones, communities and local government minister, warned that if councils failed to implement the act as expected the government could step in with a code of practice, rather than simply guidance.
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Sir Steve, who is also executive member for housing at London Councils, said the demands made on councils by the Homelessness Reduction Act are so high that London alone could swallow almost the government funding made available.
He said following the legislation “in a way true to its spirit” by carrying out more homelessness prevention work would be very costly for London boroughs.
“Our estimate is that London alone needs £77m a year, which roughly leaves a gap of £67m a year if the government figure of £73m nationally is stuck to,” said Sir Steve, who is also executive member for housing at London Councils.
He told the committee that 69% of homelessness occurred in London yet the capital would receive only 42% of the ‘new burdens’ funding offered, though he admitted “we are conscious if the pot is this small, if it was done pro rata it would leave very little for others”.
Local government minister Marcus Jones told the committee that the new burdens funding was “worked out with the Local Government Association and London Councils and I’m confident it’s robust, we’ve tested assumptions made and we’re committed to reviewing the act and the new burdens cost within two years as well. Significant savings are there to be gained for reduction in use of temporary accommodation.”
He said the Southwark Council’s work on the act as a designated trailblazer council had seen a 34% year-on-year decrease in the use of bed and breakfast accommodation to this June, and “that is one of the things we based our assumptions on for significant savings”. Southwark’s overall caseload had increased by 29%, he added.
MPs expressed concern that with no funding guaranteed beyond 2020 councils might appoint staff to deliver preventative work only to make them redundant when money ran out.
Mr Jones said: “No doubt many local authorities will need to employ new staff as a result of the act coming into place and others will find roles changing to a more preventive mind-set.”
