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Why do authorities use temporary accommodation?

Local housing authorities in England have a duty to secure accommodation for unintentionally homeless households in priority need under Part 7 of the Housing Act 1996 (as amended). Households might be placed in temporary accommodation pending the completion of inquiries into an application, or they might spend time waiting in temporary accommodation after an application is accepted until suitable secure accommodation becomes available.

The number of households in temporary accommodation

There were 96,600 households in temporary accommodation at the end of June 2021. This was a slight fall (of 1.7%) on the number a year previously, but represented part of a long-term increase.

The number of households in temporary accommodation had previously peaked in 2004, before falling steadily. This trend changed in December 2011; the number of households in temporary accommodation began to rise year-on-year after this point.

There was a sharp increase in households in temporary accommodation in the second quarter of 2020, primarily driven by an increase in single adult households placed in temporary accommodation at the start of the Covid-19 pandemic.

Authorities use a range of types of temporary accommodation, the most controversial of which is bed and breakfast (B&B) accommodation. The number of homeless households placed in B&B accommodation by English local authorities reached 13,550 in September 1991. This figure fell during the early to mid-1990s to less than 5,000 by the end of 1993. The numbers started rising again after 1996, prompting the Labour Government to announce specific initiatives to tackle this issue.

Around 63% of households placed in temporary accommodation at the end of June 2021 contained dependent children. The number of children totalled 124,290. The number of families with dependent children placed in B&B-style accommodation increased from 740 at the end of June 2010 to 1,400 at the end of June 2021, although this figure represents a decrease from a peak of 3,450 in September 2016.

Spending on temporary accommodation

The National Audit Office (NAO) published a report on Homelessness in September 2017 in which it observed that of the £1.1bn spent by English local authorities in 2015-16, £845 million was spent on temporary accommodation, of which three-quarters (£638 million) was funded by housing benefit. The NAO identified a 39% increase in real terms expenditure on temporary accommodation since 2010-11.

The NAO and others have referred to wider costs stemming from the impact of homelessness and use of temporary accommodation which represent a cost to public services, such as health care. The NAO criticised the Department’s lack of “a robust estimate of this wider cost” and called for joint working with local authorities “to ensure that they are making the most effective use of temporary accommodation.”

Analysis of expenditure by local authorities over 2019/20 reportedly showed councils spent £1.19 billion on temporary accommodation, up 9% on the previous year and up 55% on 2014/15.

Commentators note the beneficiaries of this expenditure are often private providers. Shelter (2020) suggested a lucrative private market has developed in which brokers are exploiting the difficulties authorities face in sourcing temporary accommodation. A 2021 report by the Chartered Institute of Housing found “Moving each family in temporary accommodation and into social rented accommodation saves about £7,760 per year.”

The Public Accounts Committee’s (PAC) December 2017 report, Homeless Households, observed temporary accommodation is “often of a poor standard and does not offer value for money”. The Committee recommended the Department take steps to eliminate the use of non-decent temporary accommodation and help authorities source local alternatives offering better value for money. The Government agreed (PDF, 854KB) with this recommendation.

Limiting the use of unsuitable temporary accommodation

Various initiatives have focused on limiting the use of unsuitable B&B-type temporary accommodation. For example, authorities have tried to secure private rented housing through lease agreements with private landlords.

Authorities, particularly those in areas of high housing demand, argue their ability to do this is affected by restrictions on help with rent payments through Housing Benefit and the housing cost element of Universal Credit, meaning that landlords can secure higher returns from letting on the open market to non-claimants.

One response has seen authorities seeking temporary accommodation outside their own areas. At the end of March 2021, 26,170 (27.4%) of households in temporary accommodation were in accommodation in a different local authority district. 82% of these placements were from London authorities.

Some respondents to the Communities and Local Government Select Committee’s 2015 inquiry into homeless (PDF, 704KB) called for more flexibility to provide temporary accommodation outside their local areas. The Committee called on the Government (PDF, 704KB) to initiate a “renewed, cross-Departmental Government strategy”. There was also a call to review Local Housing Allowance rates “so that they more closely reflect market rents” and “a case for the development of homes for affordable rent”.

The Local Government Association (LGA) has repeatedly called for a series of measures, including changes to the Right to Buy, to support councils to deliver 100,000 new social rented homes a year. This, the LGA argues, would provide move-on accommodation for households in temporary accommodation, thereby reducing reliance on the use of unsuitable housing and associated expenditure.

Other relevant Library Papers

Time-series data on the number of households in different types of temporary accommodation can be downloaded from the landing page for this briefing. For information on wider Government initiatives to tackle homelessness see Library briefing Statutory Homelessness in England.

Variations in approaches to homelessness in Scotland and Wales are outlined in Library briefing Comparison of homelessness duties in England, Wales, Scotland and Northern Ireland.

There is a separate paper on the Government’s approach to rough sleeping and homelessness during the Covid-19 outbreak: Coronavirus: Support for rough sleepers (England).

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