Preventing homelessness costs

This post was co-authored by Deborah Garvie and Jenny Pennington

Last week, the Government announced that it would provide an additional £48m to English local authorities to fund the new burdens they will be under as a result of likely changes to homelessness legislation. We are looking into the numbers to see if they stack up. But we have initial concerns about the way the proposed funding will be withdrawn at the point it may be needed most.

As Shelter’s recent campaigns show, there is strong public demand for the Government to tackle the devastating homelessness crisis in England. One of the ways the Government has responded to this is by supporting Bob Blackman’s Homelessness Reduction Bill, which has its final reading in the Commons at the end of this week.

Shelter supports the Bill because it entitles all those who are eligible to some help when threatened with homelessness, rather than just those deemed ‘unintentionally homeless and in priority need’.

Importantly, it also aims to encourage councils to prevent homelessness by intervening early and taking a more humane approach to what people need, rather than checking if people meet criteria and providing assistance at the point of eviction when options are severely limited.

A similar approach was introduced in Wales in 2015. Our colleagues at Shelter Cymru have been very clear that the law change alone was not enough to achieve the necessary cultural shift.  In Wales, the additional funding provided to councils (£5.6m the first year of 2015/16) has been instrumental in helping councils provide this more personalised service.

What funding is proposed in England?

Last week the Government announced that, if the law changes in England, councils will receive an additional £48m over the next three years to help them deliver this change. This is welcome, but is it enough for councils to deal with the growing numbers threatened with homelessness?

An immediate cause for concern is the way in which the proposed funding is to be introduced, and then quickly removed. We’re worried that its short term nature won’t grasp the challenge ahead.

What is the challenge between now and 2020?

Councils will receive the majority of this new funding – £35m – in 2017/18. This represents a significant increase on the £80m a year currently provided to councils to prevent homelessness (via un-ring-fenced Homelessness Prevention Grant).  But councils will have many more people to assist, and additional statutory duties.

The funding then drops to £12m in 2018/19 and then to zero in 2019/20. This is despite the fact that all forms of homelessness have been rising since 2009/10, and there is no reason to think that fewer people will need help by 2020.

It is likely that homelessness will rise in the next few years. By far the largest cause of homelessness is people being unable to find somewhere else to live when their private tenancy ends. This isn’t going to go away as an issue. In fact, our analysis shows that by 2020, four-fifths of local authority areas will be unaffordable to people claiming housing benefit.  This suggests that more people will be coming through the doors of councils, not fewer.

In addition, this funding arrangement does not seem to recognise how the new support will work, and why ongoing funding is needed to keep it working. The way that most homelessness has been prevented in Wales is by finding households somewhere else to live. Under the terms of the English legislation, this could be via a six-month tenancy. At the end of this six-month period, families may well need further help to avoid homelessness again. Within our broken housing market, it is quite possible that those helped in 2017/18, may have to return for further help a year or so later.

So we are facing a situation where by 2020, the pool of affordable homes will be smaller, benefit cuts will be deeper and some of those already helped will be again be threatened with repeat homelessness. But by then, the funding available to respond to all this will be gone. In contrast, the Welsh Government followed up its initial £5.6m funding with £3m in the second year and £2.8m in the third year (2017/18).

What needs to be done?

We’ve always said that no amount of legislation is going to reduce homelessness if there aren’t the stable, affordable family homes to help people into. To help councils deal with this crisis in the long-term the Government must commit to building homes that people on lower incomes can actually afford to live in.

But if this Bill is going to start to address the problems we face right now, then councils will need to be able to respond – whether this is by helping people overcome affordability problems in their current home, incentivising landlords to accommodate people in a tough rental market or covering increasing rents and costs. For this, councils need meaningful financial resources.

Councils will also need the staff to spend time with people to ensure a more personalised approach, help people find landlords willing to house them and work closely with other agencies, such as health and social services to strategically prevent the threat of homelessness.

We support the call of the Local Government Association for the Government to commit a review of the Bill’s impact two years after implementation, to assess whether the legislation and implementation funding is delivering on its ambition to improve services, options and outcomes for people threatened with homelessness.