New data from London Councils reveals that boroughs’ monthly spending on temporary accommodation for homeless households grew by almost 40% last year – reaching £90 million a month.

Skyrocketing rates of homelessness and a severe shortage of affordable accommodation have put major strain on boroughs’ budgets, with London Councils labelling this a “critical danger” to their financial stability.

Ahead of next week’s Budget, London Councils is calling for more government support to help councils meet these costs and reduce the risk of requiring a Section 114 notice – effectively declaring bankruptcy.

London Councils’ Executive Member for Regeneration, Housing & Planning, Cllr Darren Rodwell, said: “Homelessness has a devastating impact on individuals and families, while also bringing massive and unsustainable costs to boroughs’ budgets.

“Boroughs work hard to house homeless Londoners. However, London’s ballooning temporary accommodation bill is a critical danger to boroughs’ financial stability. If things go on the way they are, it’s no exaggeration to say these enormous costs pose a bankruptcy risk.

“We’re urging ministers to boost funding support for boroughs grappling with a worsening homelessness crisis. Ending the unfair cap on housing benefit subsidy rates for temporary accommodation would relieve much of the pressure on boroughs’ resources, helping us balance the books while providing homelessness support to everyone who needs it.”

London Councils has responded to a new report from a parliamentary committee raising concerns about homelessness among Ukrainians in the UK.

In their report published last week, the Public Accounts Committee warns that the risk of homelessness is likely to increase as arrangements between Ukrainian guests and their UK sponsors end of break down.

London Councils’ lead for asylum and refugees Cllr Grace Williams, said: “London has a long history of offering sanctuary to those fleeing war and persecution, and boroughs have been proud to play a key role welcoming Ukrainians to the capital.

“The capital’s shortage of affordable housing makes it extremely hard to find suitable accommodation for everyone who needs it. Homelessness is the worst possible outcome for Ukrainian guests and is a serious concern for boroughs. London is already grappling with the most extreme homelessness crisis in the country.

“With the conflict continuing and London’s housing pressures as severe as ever, this challenge is not going away. Boroughs will continue doing everything they can to help Ukrainian refugees into suitable accommodation. The government must ensure councils have the resources required to deliver this support, alongside all the other pressures currently facing local services.”

London Councils' Grants Team visited New Horizon's London Youth Gateway project last week with Grants Committee members Cllr Christopher Kennedy (LB Hackney) and Paul Martinelli (City of London) to take a tour of the facilities and learn more about the day-to-day work they do at the project.

London Youth Gateway is one of the projects funded under the Pan-London Grants Programme run by London Councils. The project provides services around prevention and targeted intervention for young people, making sure that young Londoners facing homelessness are safe and supported while helping them achieve long-term stability in terms of housing, income, health and migration status.

The project has supported more than 5,300 young Londoners since its launch in April 2022. You can learn more about this and other projects supported by the Pan-London Grants Programme on London Councils’
website.

Ahead of next week's Spring Budget (due to be announced 6 March), London Councils is reiterating its call for the government to address the severe financial pressures facing London boroughs, including the continuation of the Household Support Fund, adequate housing and homelessness funding and reforming the broken local government finance system.

More information can be found in London Councils’ consultation response to the local government finance settlement, which is available here.