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National Audit Office points finger at Government welfare reforms over steep rise in homelessness

15 September 2017


“Infinity”: a photo by David Fussell, part of Café Art’s annual calendar produced from images made by homeless people, who are given cameras with which to photograph London. cafeart.org.uk

“Infinity”: a photo by David Fussell, part of Café Art’s annual calendar produced from images made by homeless people, who are given cameras with which to photograph London. cafeart.org.uk

GOVERNMENT welfare reforms have contributed to a steep rise in rough sleepers, long-term homelessness, and families living in temporary accommodation, the National Audit Office (NAO) has said.

Its latest report on homelessness, published on Wednesday, states that the number of households living in temporary accommodation in England has increased by 60 per cent — to 77,240 — in the six years since March 2011. These households now contained 120,540 children: an increase of 73 per cent in the same period.

“The ending of private-sector tenancies has overtaken all other causes to become the biggest single driver of statutory homelessness in England,” the NAO says.

But rocketing renting costs in the private sector, exacerbated by Government welfare reforms such as the capping of the local housing allowance, are also to blame.

Since 2011, the Department for Work and Pensions has introduced a series of welfare reforms designed to reduce overall welfare spending and provide incentives for benefit recipients to take up employment. This included lowering the benefit cap on household incomes.

“At the same time,” the NAO says, “rents in the private rented sector in much of the country — London in particular — have increased faster than wage growth. All of these factors appear to have contributed to private rented properties becoming less affordable, which in turn is likely to be contributing to homelessness caused by the ending of an assured shorthold tenancy.”

The proportion of households accepted as homeless by local authorities “due to the end of an assured shorthold tenancy” increased from 11 per cent in 2010 to 32 per cent this year, it says. In London, the proportion rose from ten per cent to 39 per cent.

In the mean time, the number of households placed in temporary accommodation over the border in another local authority that recorded them as homeless increased by 248 per cent to 21,950.

Homelessness, defined as having no accommodation or being unable to continue to occupy any given accommodation, currently costs the public sector £1.1 billion a year. More than three-quarters of this (£845 million) was spent on temporary accommodation last year, of which three-quarters (£638 million) was funded by housing benefit.

The NAO also counted 4134 rough sleepers on a single night last autumn: 134 per cent higher than a similar count in autumn 2010.

The Department for Communities and Local Government is responsible for setting and implementing national policy on homelessness — to prevent at-risk people from becoming homeless, and to help homeless people to move into stable accommodation — and should demonstrate “value for money” in achieving these outcomes, the NAO says.

But, despite increasing local authority funding from £20 million in 2011 to £165 million in 2015, to mitigate the potential impact of its welfare reforms, a further £800 million in 2015, the Department has failed to evaluate and monitor how local authorities are using the cash.

“The ability of local authorities to respond to increased homelessness is constrained by the limited options they have to house homeless families,” the NAO reports. “There has been a significant reduction in social housing over the past few decades.”

Local authorities have increased spending on homelessness steadily since 2010, but simultaneously reduced by 21 per cent spending on the housing services that prevent homelessness during this time.

Central government has pledged to distribute £754 million to tackle homelessness between April 2016 and March 2020, through a combination of the local government financial settlements, New Burdens funding, and a grant to replace the temporary accommodation management fee previously paid by the Department for Work and Pensions — on top of its £50 million Homelessness Prevention Programme.

But the NAO says that the overall approach of the department to working with local authorities is “light touch” and requires more robust intervention, such as implementing and monitoring strategies tailored to local authorities, given the period of high homelessness. It has also failed to provide a “robust estimate” of the wider cost of homelessness on public services such as healthcare.

The NAO does, however, recognise the department’s support of the Homelessness Reduction Act 2017, which aims to give local authorities more responsibility for preventing homelessness. “The Department expects that these responsibilities will lead to an increase in prevention cases and a fall in the number of households that qualify for temporary accommodation.”

The head of the NAO, Amyas Morse, said: “Homelessness in all its forms has significantly increased in recent years, driven by several factors. Despite this, the Government has not evaluated the impact of its reforms on this issue, and there remain gaps in its approach. It is difficult to understand why the Department persisted with its light-touch approach in the face of such a visibly growing problem. Its recent performance in reducing homelessness therefore cannot be considered value for money.”

The NAO recommends that the Government develops and publishes a strategy to reduce homelessness, working more closely with local authorities to establish best practice and make the most of temporary accommodation. It should also work to understand the “interactions between local housing markets and welfare reform” to assess the causes of homelessness properly.

The charity Housing Justice were unsurprised by its conclusions, but hoped that these would be recognised in the autumn budget. Its director for England, Jacob Quagliozzi, said: “Housing Justice and our campaigning partners rightly focus on the moral repugnance of rising levels of homelessness over the last few years. The appalling numbers are driven in large part by declining welfare payments and rising rents.

“But as the report outlines there is a pragmatic reason for rethinking the underlying policy drivers here, Homelessness costs the taxpayer £1 billion a year, the government has been cutting housing benefit only to fund more expensive temporary accommodation further down the line. Not only does this fail to deliver cost effectiveness for the taxpayer it also creates chaos and misery in the lives of thousands of people forced in to homelessness.”

The chief executive of the homelessness charity Depaul UK, Martin Houghton-Brown, said: “While the Homelessness Reduction Act 2017 should help, there is a real risk it will be undermined by welfare reforms — particularly the roll-out of Universal Credit and proposed changes to supported accommodation funding.

“It is important that ministers look again at the amount of time people have to wait to receive their first Universal Credit payment. Many of the young people we work with are having to wait at least six weeks, during which time they struggle to pay their rent and, in some cases, have to rely on foodbanks.”

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