New research published today by London Councils shows boroughs in the capital city were forced to overspend by at least £330million in 2024-25.
On the surface London is a beautiful capital city with dozens of glamorous attractions. Even small street corners come decorated with quaint cafes or flower stalls. However, like the majority of things in life, it isn’t perfect. One of the main problems that has been plaguing London for decades is homelessness and arguably the issue has now become worse than ever.
New research, which was published this morning (Thursday 24th April) by London Councils, shows homelessness represents the ‘single biggest risk’ to boroughs finances and has even put some on the cusp of bankruptcy.
According to statistics, the number of homeless individuals looking for temporary accommodation in London has increased to 183,000 – the highest level on record.
The cross-party group found the skyrocketing number of rough sleepers and spiralling temporary accommodation costs mean boroughs were forces to overspend on their homelessness budgets by at least £330million within the last financial year, which represents a 60% increase on their original budget plans.
What’s more, experts revealed that local authorities are having to plug bigger gaps in their temporary accommodation funding as a result of not receiving enough subsidy from the government. In 2023-24 the gap was around £96million but London Councils estimates the gap for 2024-25 reached £140million.
Against this backdrop, researchers have warned if current trends continue more boroughs will have to apply for emergency support and could be at risk of issuing Section 114 notices.
‘The worsening homelessness emergency is devastating the lives of too many Londoners and represents the single biggest risk to boroughs finances,’ Cllr Grace Williams, London Councils’ Executive Member for Housing and Regeneration said. ‘Homelessness spending is fundamentally driven by factors outside our control. Boroughs have a legal duty to provide homelessness support – and we’re seeing homelessness numbers skyrocket while accommodation costs spiral.
‘If things carry on as they are, we will see more boroughs’ become effectively bankrupt. This brings massive uncertainty to the future of our communities’ local services and could ultimately mean more costs to the government when emergency interventions are required.’
In a bid to evoke change, London Councils is now calling on the government to:
- Help councils meet the cost of temporary accommodation
- Make the increase in Local Housing Allowance rates a permanent measure
- Bolster work on the national cross-departmental strategy to reduce homelessness
- Boost long-term funding for affordable housing
The research from London Councils can be accessed in full on their website which can be found here.
Image supplied from London Councils.
In related news:
Senze created to address UK’s social housing retrofit challenge
Leave a Reply