Smart thinking on homelessness

Posted: May 20, 2025 | Author: julesbirch | Filed under: Homelessness, Wales |Leave a comment

Originally written as a column for Inside Housing.

Within the next few months the government will set out what it intends to do about homelessness and how it will pay for it.

A new report argues that the prospect of the homelessness strategy and spending review present it with ‘a vital opportunity to shift away from reactive measures towards a more proactive and preventative model’.

A smarter approach to homelessness, published by the Institute for Government and Centre for Homelessness Impact, makes clear that the current system is achieving the exact opposite.  

Rather than providing permanent homes, the system keeps families with young children in temporary accommodation at a cost that can easily be £30,000 a year or more, with social costs even higher than that thanks to the knock-on effects on education and health.

But even as they try to book temporary accommodation, councils can find themselves out-bid by companies acting for other parts of government for accommodation for asylum seekers and prison leavers.

Despite evidence that prevention costs many times less, cash-strapped local authorities are forced to ‘retreat to short-term reactive responses in fulfilment of their immediate legal obligations, despite their often exorbitant cost’, often raiding prevention budgets to pay for it.

Structural barriers, most obviously a lack of social housing, block progress while the system creates ‘perverse incentives’ that ‘actively encourage inefficiencies and poor outcomes’.

As the latest homelessness statistics show, the number of homeless families and children in temporary accommodation was still rising in the fourth quarter of 2024.

The numbers of bed and breakfast did at least show a second consecutive monthly fall, but the numbers in nightly-paid accommodation are still rising along and there are eight times as many out of area placements as when Labour was last in government.

The report argues that ‘two foundational pivots’ are needed.

First, the Treasury should make clear that it will prioritise investment in ‘upstream prevention work’ rather than high-cost reactive spending.

Second, the centre of government should set the expectation that tackling homelessness is not the responsibility of the housing ministry alone ‘but is a responsibility and requirement shared across all arms of the state’.

These would be a huge shift in the way that the Treasury and Whitehall operate and the report calls for a £100 million Preventing Homelessness Endowment, a strategic investment fund designed to pay for itself by driving innovation and solutions that can be scaled up, as well as a trial of a new version of the Total Place method of funding public services.

We will find out soon whether those kind of arguments have worked but Westminster would also do well to lift its gaze beyond England, where, despite positive moves such as the Homelessness Reduction Act 2017, progress remains far behind Scotland and Wales.

Both the Labour government in Cardiff and the SNP administration in Edinburgh have committed themselves to making homelessness rare, brief and unrepeated and have progressively strengthened their homelessness legislation and enshrined a preventative approach.

The Housing (Scotland) Bill currently going through the Scottish Parliament will introduce an ‘ask and act’ duty on social landlords and key parts of the public sector including health, police and the prison service to ask about a person’s housing situation as soon as possible and act to avoid them becoming homeless.

And this week the Welsh Government has introduced a Homelessness and Social Housing Allocation (Wales) Bill that it says will ‘fundamentally change our homelessness system’ so that it is focussed on prevention (exactly as advocated in the report for England).

Alongside a similar ‘ask and act’ duty, it will also abolish the priority need and intentionality tests, modify the local connection test, extend the prevention period from 56 days to six months and give homeless applicants a right to a review of decisions taken on their case.

The Bill also gives local councils a new power to request social landlords ‘to make an offer of suitable accommodation in their area for a specific applicant owed the final homelessness duty’. Social landlords must comply unless there is a good reason.

There has already been considerable debate about these issues, with local authorities concerned about resources for implementation and housing associations worried about the new power over allocations.

Will passing the Bill be like a magic wand? Probably not. Homelessness and temporary accommodation are still significant problems in Scotland and Wales.

Both nations, though, are way ahead of England, taking that smarter approach to homelessness and setting a benchmark for the English housing ministry.

However, strategies and legislation can only take us so far: turning them into reality depends on decisions taken at a UK level by the Treasury in the spending review.

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