Government homeless funding ‘wasted’ without coherent strategy

New report reinforces frontline case for combined strategy tackling both homelessness and housing with a cross-departmental programme.

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Government may be committing significant sums of public money to tackling homelessness, but it is largely wasted by being “spent inefficiently and in the wrong places”.

A report released by the Local Government Homelessness Commission says it now a “matter of urgency” that government commits to a “coherent, combined” housing and homelessness strategy with sustainable funding for councils to put preventative programmes in place.

This, the report says, must include a firm commitment beyond the 2020 deadline for new burdens funding.

Also recommended are local variations of housing allowance and minimum three-year tenancies.

Responding to the report, LGA housing spokesman Cllr Martin Tett said that with homelessness services facing a funding gap of more than £100m in 2019/20 and £421m by 2024/25, the government needs to use its upcoming Spending Review to secure such sustainable funding.

“Many councils have updated their homelessness prevention strategies since the Homelessness Reduction Act was introduced last year,” said Tett.

“But a lack of affordable housing has left many struggling to cope with the rising number of people coming to them for help and having to place more families and households into temporary and emergency accommodation as a result.”

“This is why councils need to be able to keep 100% of Right To Buy receipts to re-invest in genuinely affordable homes, set discounts locally, and government needs to adapt welfare reforms to protect families at risk of homelessness and prevent homelessness from happening in the first place,” he said.

Polly Neate, chief executive at Shelter, said the report reflected problems service users come to Shelter with every day – spiralling rents, inadequate housing benefit payments, and getting stuck in unsuitable temporary accommodation.

“With councils in a vortex of increasing demand and dwindling funds, the only sustainable solution to this crisis is the national provision of homes that local people can actually afford – and on a scale that is actually going to make a difference,” said Neate.

“That’s why Shelter is calling for a renewal of social house-building in this country – 3.1m homes over the next 20 years.”

The report accuses the government of looking to address “the problem they can see”, and so talks about rough sleeping without addressing the wider and deeper issues – exacerbating the crisis through poor policy choices where it has acted and by neglect where it hasn’t.

“[Councils] are tackling an ever-growing homelessness crisis in our communities on a shoestring, with less and less money to do so,” said Jonathan Carr-West, CEO of LGiU.

“The government can no longer expect local government to pick up the pieces.”

But depleting resources and a lack of powers to intervene in the housing market means that councils will be increasingly frustrated in their efforts to prevent homelessness, the report says, reinforcing the ‘frontline’ case for a combined strategy tackling both homelessness and housing with a cross-departmental programme.

There’s acknowledgement for improvements seen so far through the Homelessness Reduction Act (HRA), but this, the report says, does not amount to prevention but addresses the issue at one point in the chain, when the risk of homelessness is already acute.

The finance that central government provides to councils is described as “piecemeal, inadequate” and not providing a “sustainable or certain” source of funding for strategic planning.

Councils are instead said to pitch for small pots of money, tap in to limited and depleted pools of resource in other departments and generally work on a shoestring when charged with applying transformative change.

The report recognises work done by Shelter and others that says government can and should borrow to fund more building and a decent housing strategy.

“But we need to go further. Without significant strategic funding, therefore, the systems in place under the HRA will remain procedural,” the report says.

“They will result in an improved assessment process, but with no ultimate outcomes because there is not the sustainable and affordable housing, mental health support, addiction services, or other infrastructure that will actually address the causes of homelessness.”

Included among the report’s recommendations are:

  • A sustainable housing and homelessness strategy, with adequate funding

The report recognises homelessness is a much bigger issue than rough sleeping – for every two people sleeping rough on the streets, there are 98 in shelters, temporary accommodation, bed and breakfasts, or moving between precarious forms of accommodation.

As such, the report says the narrative must change so that it encompasses all forms of homelessness with an approach that addresses the “real, underlying” issues.

Councils are said to have been tasked with solving a significant big social and political challenge with inadequate resources to take on the task, with funding for homelessness services piecemeal, unproductive and fragmented.

As a result, there are various small pots of money that help to fund pockets of innovative practice.

The HRA has had a positive impact on culture and on the processes within local authorities. But councils need certainty.

Without funding to instigate real change in the outcomes, the HRA will only have created an ‘assessment process’, without achieving any of its stated aims.

As a matter of urgency, the government should commit itself to a coherent, combined housing and homelessness strategy with sustainable funding for local authorities to put preventative programmes in place – this must include a firm commitment beyond the 2020 deadline for new burdens funding – the report says.

  • Local variation of housing allowance

The report says significant sums of public money spent on homelessness are largely wasted by being spent inefficiently and in the wrong places.

Local Housing Allowance is singled out as a costly and inefficient transfer of public funds to private landlords that fails to achieve the goals of reducing or preventing homelessness.

In many parts of the country, LHA rates are well below local market rents, while in some areas the rental market is distorted by how rates are calculated, bringing high- and low-demand areas together within the same bracket.

To the report, this means that tenancies are unsustainable, conditions are too often poor, and councils cannot access decent accommodation to house people when they are at risk of homelessness.

The report says councils should have the power to vary LHA rates to better reflect local housing market conditions.

Greater variation is seen as offering a far more efficient use of public money, enabling more people to carry on living independently, as well as facilitating councils carrying out their homelessness duty in the private rented sector.

The report references Ireland, where the government has transferred LHA to housing departments and away from welfare departments.

Along with a large programme of investment in affordable housing supply, this is seen as represents a coherent strategic approach to housing and homelessness policy.

  • Private rented sector

The private rented sector is a rapidly growing part of the housing market, and the breakdown of a PRS tenancy is now the most common route into homelessness.

But the report recognises recent policy changes have weakened the position of small-scale private landlords, seen as a vital part of the housing market.

To address instability and uncertainty in the private rented sector, the report says government should introduce minimum three-year tenancies.

In return, the importance of good landlords should be acknowledged, and they should be supported to stay in the market.

This, the report says, would provide greater long-term security and stability for people renting private sector housing.

In 2018, the government announced it was considering introducing three-year tenancies as a standard minimum for private sector renting.

However this proposal was withdrawn in the Autumn, citing the potential risks to investment in the sector.

Some private developers, with large investments in rental properties, said they were surprised by the government’s decision and argued that a mandatory minimum of three year tenancies would not be a burden.

The Residential Landlords Association said that there was significant demand among private tenants for an increase in the minimum-length tenancy.

Meanwhile, the Treasury and the Prime Minister, Theresa May, said that longer tenancies should be voluntary rather than mandatory.

  • A homelessness prevention toolkit, designed around the needs of local government

The report urges the creation of a homelessness prevention toolkit for councils, with government investing in a project to identify what information councils need, particularly from central government departments; where the information is held; and what would make it most useful for preventing homelessness.

And this project, the report says, should be led by councils and based on the experience of council staff and service users.

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