New government data has revealed the sprawling level of expenditure on temporary accommodation (TA) facing local councils, with the total cost of TA between April 2025 and March 2026 coming to £2.93bn. The figure equates to an 88% rise in five years, the equivalent of £8.04m per day.
The figures quantify the drastic economic consequences of rising homelessness across England as the cost-of-living crisis, underinvestment in social housing and extortionate private rents intersect. As social housing waiting lists continue to grow, hundreds of thousands of households are trapped in unsuitable TA, with the number of children living in temporary accommodation reaching record levels for the past eight years.
The cost of this homelessness is widely absorbed by local councils, and has grown to be a black hole in many council budgets, draining resources from other vital initiatives. Speaking in response to the new data on councils’ temporary accommodation spend, Cllr Carl Cashman, Chair of the LGA’s Inclusive Growth Committee, said:
” Councils are caught in a vicious cycle of ever-increasing temporary accommodation costs versus static rates they receive back to cover their costs. While it’s positive that the rate of increase in spending on temporary accommodation has slowed, the fact that it’s still growing is alarming.
“The way that councils are funded and reimbursed by central government is not working, and it’s impacting the entire country due to the knock-on effect on budgets and all other services.
“While there have been positive steps to address broader homelessness challenges, councils need the Government to provide sufficient funding and tackle the root causes of homelessness with more council housebuilding and to reduce demand for temporary accommodation.”
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John Glenton, Chief Care and Support Officer at Riverside, said: “It’s unacceptable that councils have spent close to £3bn on Temporary Accommodation (TA).
“Longer term this means that almost £11.5bn has now been spent on TA over the past five years.
“This is having a crippling effect on the lives of families including more than 177,000 children currently living in TA. It has a severely detrimental impact on their development and it’s torturous for families who are deprived of their basic need for sleep, somewhere they can study and make a warm, healthy meal.
“We all know there is an urgent need to get more families out of TA and into good quality supported housing. Until then, the government needs to look at reforming welfare support including LHA rates and raising living standards for those in TA.”
Nearly two-thirds of the spending went towards emergency B&Bs and nightly-paid accommodation. B&B spending in total rose by 89%, despite the poor quality and living conditions often faced by families seeking support.
Regardless of the economic damage being caused by the housing crisis, the true cost is the human one. Children living in TA face housing instability, stress and social isolation, and those unable to secure temporary accommodation face even further consequences to their mental and physical health. Affordable, secure housing is the only remedy to the root cause of rising homelessness, a crisis that is a travesty to be unfolding in the country with the fifth largest economy in the world.
