The Bench Report

Funding Crisis: Why Homelessness Is Rising and the Search for Sustainable Solutions

• The Bench Report • Season 5 • Episode 12

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Local authorities struggle to cope with the soaring £2.8 billion cost of temporary accommodation (TA) and the severe impact of systemic issues like the continued freeze on the Local Housing Allowance (LHA). The conversation highlights the critical need for a new cross-Government strategy focused on prevention, and examines effective approaches like Housing First, which provides stable housing and intensive support to break the cycle of crisis management.

Key Takeaways

  • Homelessness is at record levels in England, with 300,000 individuals and families experiencing the worst forms in 2024, a 22% increase from 2022.
  • London faces the most acute pressures, accounting for 56% of all homeless households in temporary accommodation nationwide.
  • Funding uncertainty is threatening service providers, with some vital emergency bed spaces and supported accommodation potentially closing.
  • Major drivers of homelessness include the lack of social housing and increases in homelessness caused by people leaving public institutions like hospitals and prisons.
  • The Housing First model has proved highly effective internationally and in UK pilots, achieving tenancy sustainment rates of around 84% for people with complex needs.
  • There are concerns that unscrupulous landlords are using higher exempt housing benefit rates to profit from substandard supported accommodation, emphasizing the need to implement the Supported Housing (Regulatory Oversight) Act 2023.

Definitions

  • Temporary Accommodation (TA): Housing arranged by local authorities for homeless households, which often involves very expensive nightly-paid accommodation, placing enormous financial strain on councils.
  • Local Housing Allowance (LHA): A benefit designed to help private renters cover housing costs. The continued freeze on LHA is a major driver of homelessness, as very few homes for rent are affordable for those who rely on it.

Source: Homelessness: Funding
Volume 776: debated on Tuesday 2 December 2025

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No outside chatter: source material only taken from Hansard and the Parliament UK website.

Contains Parliamentary information repurposed under the Open Parliament Licence v3.0...

Amy:

Hello and welcome once more to the Bench Report, where we discuss recent debates from the benches of the UK Parliament. A new topic every episode. You're listening to Amy and Ivan.

Ivan:

Today we're looking at the adequacy of homelessness funding, and the figures from recent debates really do paint a stark picture.

Amy:

They certainly do. I mean, the scale of the crisis right now seems, frankly, unprecedented.

Ivan:

It is. We're looking at record levels. For 2024, the estimates show around 300,000 individuals and families experiencing the uh the worst forms of homelessness.

Amy:

A 300,000. And that's a significant increase, isn't it?

Ivan:

It is, yes. It's a 22 percent rise on the figures from just two years ago in 2022.

Amy:

And these numbers aren't spread evenly across the country. There's a real concentration, particularly in the cities.

Ivan:

Absolut. The crisis is heavily focused in urban areas, and London, well, London bears the greatest strain by far.

Amy:

What does that look like on the ground?

Ivan:

It means London accounts for 56 percent of all homeless households living in what's called temporary accommodation or TA across the whole of England.

Amy:

56 percent. Just in the Capitol.

Ivan:

Just in the Capitol. To put that another way, it translates to one in every 50 Londoners.

Amy:

One in 50.

Ivan:

And that includes over 97,000 children.

Amy:

Wow. And if you think about that, it means there's at least one child in every single London classroom who is technically homeless.

Ivan:

Exactly. And beyond that, you have the most visible side of the crisis. The latest rough sleeping estimates for mid-2025 showed 8,732 people in England sleeping rough.

Amy:

Which is another increase.

Ivan:

A five percent increase, yes. And a huge point of concern with winter just around the corner.

Amy:

So we know the extent of it, but what are the policy drivers? What's actually pushing people into this situation?

Ivan:

Well, the debates really zeroed in on two sort of major pressure points. First, there's a chronic long-term undersupply of social rented housing.

Amy:

The long-term fix that isn't there.

Ivan:

Precisely. And second, the more immediate issue is the continued freeze on the local housing allowance, the LHA.

Amy:

That's the benefit meant to help people on low incomes cover their rent.

Ivan:

It is. And because it's frozen, it just doesn't meet the real cost of renting anymore. The numbers are shocking. Fewer than three in every hundred rental homes are actually affordable for someone relying on LHA.

Amy:

So people are just completely pressed out. They have nowhere to go.

Ivan:

They have nowhere to go. And that is putting an incredible strain on local councils and other public services.

Amy:

I saw a note about that. Homelessness that actually starts in other public institutions is on the rise.

Ivan:

Dramatically. Homelessness after being discharged from hospital rose by 37% last year. From prison, it was up 22%. Councils are basically left to pick up the pieces.

Amy:

Which must be costing them an absolute fortune.

Ivan:

The figures are staggering. In 2023-24, local authorities spent nearly 2.3 billion pounds on temporary accommodation.

Amy:

2.3 billion.

Ivan:

And just to make that more tangible, London boroughs collectively are now spending 5 million pounds a day on TA.

Amy:

Five million pounds every day.

Ivan:

Every day. And that's money that can't be spent on prevention work that might actually solve the problem.

Amy:

So that leads us to solutions. The conversation seems to be shifting, focusing on prevention over these very expensive cures.

Ivan:

Yes, and the most impactful idea discussed was adopting a national housing first strategy. It's a completely different approach.

Amy:

How does that work?

Ivan:

Well, it gives people stable, settled accommodation first, regardless of other issues they might be facing. The idea is that a stable home is the foundation for recovery.

Amy:

And does it work?

Ivan:

The pilots have been incredibly successful. They showed an 84% tenancy sustainment rate for people with really complex needs. It proves stability works.

Amy:

But there are concerns about the funding for this kind of strategy, aren't there?

Ivan:

Huge concerns. There's a new consolidated grant of 2.4 billion pounds for 2026-29. But when you consider that 1 billion pound was allocated for 2025-26 alone, it starts to look an awful lot like a funding cut.

Amy:

So what are the most critical actions that need to be taken right now?

Ivan:

Two things came up repeatedly. First, urgently raise the LHA rate so it actually covers the cost of renting again. And second, finally implement the Supported Housing Act from 2023 to crack down on rogue providers who are profiting from this crisis.

Amy:

So considering that councils are spending that $2.3 billion a year on just managing the crisis, the fundamental question seems to be this: if proper ring-fenced investment in prevention saves money across the board in health, justice, and housing, why do governments continually seem to prioritize managing the chaos instead of actually ending it?

Ivan:

A very good question.

Amy:

As always, find us on social media at bench report UK. Get in touch with any topic important to you. Remember, politics is everyone's business. Take care.

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