Housing shortage forces councils to spend £2 million a day on temporary accommodation

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A chronic shortage of affordable housing is forcing cash-strapped councils to spend more than £2 million a day on temporary accommodation for homeless families, analysis by the Local Government Association reveals today.

The LGA, which represents more than 350 councils in England and Wales, is calling on government to use this week’s Spring Budget to free councils from borrowing limits hampering their ability to build new homes, and to adapt welfare reforms to protect families at risk of homelessness.

The number of affordable homes built in 2015/16 fell by 52 per cent and was the lowest number in 24 years. Just 6,554 social rented homes were built in the same year.

A steady decline in affordable housing and squeezes on household incomes has seen the number of households local authorities have been forced to place in temporary accommodation rise by 50 per cent since 2010.

Almost 75,000 households are currently living in temporary accommodation, including bed and breakfasts, hostels and private rented accommodation. This is bad for families and communities and expensive for councils.

This crisis is spreading nationwide. Since 2010, the use of temporary accommodation has gone up 44 per cent in London and 67 per cent across the rest of England.

The LGA is also calling for a temporary lifting of the Local Housing Allowance freeze to help ensure the provision of accommodation for vulnerable families.

Lord Porter, LGA Chairman, said: “Homelessness is spreading across all areas of the country.

“Funding pressures are combining with a lack of affordable housing and private sector rents rising above household incomes to increase homelessness. It is also leaving many councils struggling to find suitable accommodation for those in need, particularly those who are young, vulnerable, or with families.

“With councils continuing to face huge financial pressures, it is unsustainable for them to have to spend £2 million a day to house vulnerable people at the sharp end of our housing crisis. Councils would much rather invest this scarce resource in building new affordable homes and preventing homelessness happening in the first place.

“A renaissance in housebuilding by councils and a plan to reduce the squeeze on household incomes are both needed if we are to stand any chance of solving our housing crisis, reducing homelessness and the use of temporary accommodation, and sustainably reducing the housing benefit bill.

“Communities across the country need a new deal with the Chancellor that gives councils the ability to borrow to invest in housing and to keep 100 per cent of the receipts from any homes they sell to replace them and reinvest in building more of the genuine affordable home they desperately need.”