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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 94,870 households in temporary accommodation at the end of June 2022. This was a 1% decrease on the number a year previously, but the number of households in temporary accommodation has been increasing in the longer term. A total of 120,710 dependent children were housed in temporary accommodation in June 2022.

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.

The number of single adults in temporary accommodation remains higher than pre-pandemic levels, while the number of households with children has fallen. Overall, the number of households in temporary accommodation is slightly lower than the 2020 peak, but there hasn’t been a substantial decrease.

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. Numbers began to fall again in 2003.

However, the number of households in B&B-style accommodation has been rising since 2013, and saw a sharp increase after the start of the Covid-19 pandemic. By June 2022, there were 10,000 households in B&B-style accommodation.

The number of families with dependent children placed in B&B-style accommodation increased from a low point of 400 at the end of December 2009 to 2,320 at the end of June 2022, although this figure represents a decrease from a peak of 3,450 in September 2016.

The homelessness charity Shelter has said temporary accommodation is “not proving to be temporary at all” pointing out that some families have been in this accommodation for over ten years.

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 to public services stemming the use of temporary accommodation, 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 2021/22 reportedly showed councils spent at least £1.6 billion on temporary accommodation.

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) with this recommendation.

Desk research conducted by The Smith Institute (2022) found increased demand for temporary accommodation in some areas (mainly London and Greater Manchester) “is placing a huge strain on some boroughs”.

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 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 June 2022, 26,130 households in temporary accommodation were in accommodation in a different local authority district. 83% of these placements were from London authorities.

Some respondents to the Communities and Local Government Select Committee’s 2015 inquiry into homeless (PDF) called for more flexibility to provide temporary accommodation outside their local areas. The Committee called on the Government (PDF) 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.

There is a separate paper on the Government’s approach to rough sleeping: Rough sleeping (England).

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