Expenditure on Temporary Accommodation Increased Tenfold Between 2011-24

New analysis from the Local Government Association (LGA) has found that council expenditure on temporary accommodation (TA) increased by a massive 1077 per cent in real terms between 2011/12 and 2024/25.

This equates to councils spending £6 billion (1) across this 13-year period. Of this, £2.2 billion, over one third (37 per cent) was in the two-year period of 2023/24 and 2024/25 alone (2).

The LGA said councils would much rather invest this scarce resource in building new affordable homes and preventing homelessness happening in the first place. The analysis shows how the issue is widespread across the country, with all regions of England seeing significant increases.

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TA spend continues to be concentrated in London, but there are clear signs of pressure across the country with several regions seeing higher rates of increase in spend, albeit from a lower base.

TA is a major drain on council finances, with local authorities having to stretch budgets further and further, as more people turn to their council for support with housing.

While households receive the full housing benefit they are entitled to, the amount councils can claim back from the Department for Work and Pensions is currently capped to 90 per cent of Local Housing Allowance (LHA) rates from back in 2011.

This means councils are not able to claim back costs that reflect what they are spending, and it is increasingly getting worse as the demand for TA rises and they can claim back less, an issue that is damaging council finances and draining resources from other important departments.

The LGA has called for the Government to address this issue by uprating the LHA rate councils can be reimbursed to 90 per cent of the prevailing LHA rates, as well as calling for further government support to help councils to tackle homelessness.

Cllr Eamonn O’Brien, Chair of the LGA, said: “Temporary accommodation is a huge leak in council budgets that needs to be patched quickly and, at its heart, transform the lives of families and children across the country.

“While the Government’s focus on prevention has been encouraging, we need both swift action and long-term solutions from the next Prime Minister and their administration.

“The way that councils are 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.

“The increasing use of temporary accommodation is not only financially unsustainable for councils but is hugely disruptive for individuals and families placed in them.

“Ensuring there are sufficient homes for people is the foundation for strong communities – as our plan to tackle homelessness shows, councils are a key player in this effort and we look forward to working with the government towards this goal.”