Districts warn of ‘human misery’ as homelessness grant is set to be slashed

Districts experiencing some of the worst homelessness pressures are set to lose millions in prevention funding under Government plans, analysis suggests.

Areas in England including coastal towns, rural communities and university cities face substantial cuts to the homelessness prevention grant under a proposal to change the way allocations are distributed.

A new formula, which is currently subject to consultation, fails to account for the reality of local housing market conditions and factors driving homelessness such as household sizes, social housing levels and affordability of properties for private rent, according to critics.

The analysis shows London boroughs will receive an average increase of 10% in their annual prevention grant, while many outside cities with high costs of living face substantial cuts – despite experiencing some of the steepest rises in homelessness.

For example, the demand for temporary accommodation in the south coast town of Hastings has soared from 37 households in 2016 to 567 today, with council spending on the issue rising annually from £730,000 to £6.5 million in five years.

Just 1% of the town’s properties are affordable within current housing benefit rates, but Hastings borough council is facing a loss of £754,000, or 34%, of its annual grant.

Likewise, the number of households requiring homelessness support in Oxford has risen by 128% in three years, but Oxford city council stands to lose £776,708, or 36% of its funding.

There are 164 district councils in England covering populations totalling 20 million.

The DCN said the number of households in temporary accommodation in these areas has jumped by 49.9% in three years, during which time there has been a 70% increase in households with children needing emergency housing.

Waiting lists for social housing have also swelled to 303,000 households, with some areas seeing increases of more than 50% since 2020.

Data shows requests for homelessness support in district areas remains high, as 21% more households are now seeking council help to avoid homelessness than in September 2021.

Hannah Dalton, a spokesperson for the DCN on housing, said the forthcoming cut to prevention grants “defies logic” at a time of severe pressures.

She added: “Much of the recent growth in homelessness has been felt hardest outside of the biggest cities, including rural communities, market and coastal towns, university cities and places where London boroughs have relocated many of their own homeless people, yet the Government’s funding plans will see such places lose out.”

Ms Dalton described the funding as “a lifeline” that prevents people from losing their homes through measures such as emergency support to cover rent arrears and help with deposits.

She added: “Without proper funding, councils will be forced to make impossible choices about which desperate households they can help.

“Behind the data lies real human misery – children facing disrupted education, families living in squalor and workers having to leave jobs because they can no longer afford the commute. Let’s work together to ensure the funding system offers fairness to people in all places.”

The concerns have been raised as rough sleeping in England has risen by a fifth in a year, according to new snapshot estimates, while separate data showed a record high for both households and children in temporary accommodation.

There were an estimated 4,667 people sleeping on the streets on a single night in autumn last year, according to annual Government statistics.

This was an increase of 769 people – or 20% – on the previous year’s snapshot estimate of 3,898.

The latest figure is more than twice the number since the estimates – the latest of which are based on a single date in October or November chosen by local authorities – began being recorded in 2010, when it was 1,768.

The proposed prevention grant formula is expected to be most damaging for councils that have to use private temporary accommodation, with costs far exceeding housing benefit rates.

Some of these districts are now spending over a quarter of their council tax income on homelessness services while in Hastings, this figure reaches 58%.

Glenn Haffenden, deputy leader and lead councillor for housing and community wellbeing at Hastings borough council, said: “We are disappointed with the proposed changes to the homelessness prevention grant formula.

“This could see Hastings lose out on £750,000, which would have a huge impact on our homeless prevention services.

“It would wipe out the increased funding we received last year and would mean us having to make difficult decisions about other council services which we would no longer be able to fund due to having to redirect funding towards tackling homelessness.”

A Ministry for Housing, Communities and Local Government spokesperson said: “This Government is taking urgent and decisive action to end homelessness for good, and we are consulting on the homelessness prevention grant to ensure funding is distributed fairly and in line with demand.

“Alongside this we are providing £1 billion in additional support for homelessness services and tackling the root causes of homelessness by abolishing Section 21 no fault evictions and as part of our Plan for Change, building 1.5 million new homes, including the biggest increase in social and affordable housing for a generation.”

A spokesperson for London Councils, which represents London’s 32 boroughs, rejected any implication that London authorities do not need extra money to deal with a homelessness emergency in the capital.

They added: “London is the epicentre of the homelessness crisis.

“London families make up 56% of homeless households nationally, yet boroughs receive just 42% of homelessness prevention grant. Skyrocketing homelessness numbers and costs are driving London boroughs to the verge of bankruptcy.

“Homelessness is a national emergency and every council across the country needs sufficient funding if we are to bring it under control. To suggest London does not need additional funding for homelessness pressures is completely at odds with the current reality.”

Here are the details of the district councils said to be worst affected by the change in the way homelessness prevention grants are calculated. The list reads from left to right with the name of the council, the amount of grant they are expected to lose and the percentage loss.