Brent
Council was recently warned by its finance officers about the financial
pressures on the Council and the need to make further ‘savings’ that will
impact on services. The warning comes in the wake of a substantial increase in the
Council’s housing costs as a result of the soaring numbers of homeless people,
higher rents in the private sector when placing such families in temporary
accommodation, and the shortage of private rented accommodation. There are also
pressures on the Adult Social Care budget (higher charges are in the pipeline) and
some local authority schools are running deficit budgets.
Faced with
that situation the leader of Brent Council, Muhammed Butt, has signed a letter
along with 118 other council leaders to the Chancellor calling on him to
address the homelessness and temporary accommodation crisis that threatens
local government’s financial sustainability and the services upon which
England’s most vulnerable people rely.
The letter is signed by
councils from across the country led by Conservatives, Labour, Liberal
Democrats, the Green Party and Independents. It follows an emergency summit
held last week (Tuesday, 31 October), co-hosted by Eastbourne Borough Council
and the District Councils’ Network.
According to the Department of
Levelling Up, Housing and Communities, the cost of temporary accommodation to
councils reached £1.7bn last year and it is increasing rapidly.
The signatories included 108
district councils – two-thirds of the total. In many parts of the country,
district councils are the tier of principal government closest to communities
and they oversee services including housing, leisure centres and waste
collection. The rising cost of temporary accommodation hits district councils
particularly hard due to a large proportion of their budgets being devoted to
housing.
The Councils are calling for a
meeting with the Chancellor ahead of his Autumn Statement to consider their demands:
This is the letter:
Dear Jeremy,
The
unprecedented pressure on temporary accommodation services
An unprecedented number of people are turning to
councils as the last option for support when they face homelessness. As
councils, we are proud of the help we give to people when they need
it, but our situation is becoming untenable. We have had no option but
to rapidly escalate our use of temporary accommodation, which is threatening to
overwhelm our budgets.
The level of concern was demonstrated when 158
councils attended an emergency summit on 31st October, organised by the
District Councils’ Network (DCN) and Eastbourne Borough Council. The scale of
the problem was also shown by a recent DCN survey in which 96% of our
member councils reported an increase in use of temporary accommodation –
four-fifths of them describing this as ‘significant’.
The ensuing increase in costs is a critical risk
to the financial sustainability of many local authorities and we urge you to
act swiftly to ensure we can continue our vital work. The pressure is
particularly acute for district councils because housing costs constitute a far
bigger proportion of our overall expenditure.
Without urgent intervention, the existence of our
safety net is under threat. The danger is that we have no option but to start
withdrawing services which currently help so many families to avoid hitting
crisis point. There will also be a knock-on impact on other cherished council
services, which councils could also have to scale back, and on other parts of
the public sector – such as the NHS – which will be left to pick up the pieces.
Councils and our partner organisations in health, policing and
education, as well as the voluntary sector, have had considerable success in
recent years in moving the whole local system towards preventing homelessness,
rather than just dealing with the consequences.
However, the supply of permanent, affordable housing has fallen in
many places while the impact of the rising cost of living is making housing too
costly for many people. This impacts on the health and wellbeing
of households affected. Some areas also experience added pressure due to
the placement of asylum seekers in local hotels and other temporary
accommodation.
We do believe there is a way forward, as DCN set out to you in our
Autumn Statement submission on 13 October. We are urgently calling on the
Government to:
·
Raise Local Housing Allowance rates to a level that will
cover at least 30% of local market rent and commit to annual uprating.
·
Provide £100m additional funding for Discretionary Housing
Payments in 2023-24 and an additional £200m in 2024-25.
·
Provide a £150m top-up to the Homelessness Prevention Grant
for 2024-25.
·
Review the cap for housing benefit subsidy rate for local
authority homelessness placements.
·
Develop policy to stimulate retention and supply in the
privately rented sector.
·
Give councils the long-term funding, flexibility and
certainty needed to increase the supply of social housing.
Considering the urgency and scale of these matters, we would
welcome a meeting with you ahead of the Autumn Statement.
We firmly believe that action on these issues
will ensure that all councils can continue to provide an effective homelessness
safety net. We also believe that these measures will be cost effective by
ensuring homelessness is prevented, reducing public expenditure in future.
The human cost of homelessness is
immense. With your help we can prevent it worsening.
In total, 119 council leaders from
across England have signed this letter.