In 2017/18, London local authorities spent over £900 million assessing, assisting and accommodating homeless households. Some £200 million of this money came from their own general funds (i.e. costs not met from specific central government homelessness grant funding or from income received – such as from rental payments).
As intended, the Homelessness Reduction Act (HRA) has increased the number of households approaching boroughs for assistance since its introduction in April 2018. In the first year of the HRA, around 55,000 households were assessed by a London borough homelessness service as compared to an average of under 30,000 per annum over the previous ten years.
Looking forward, our estimates suggest that on the most likely (central) scenario, the call on boroughs’ general funds will rise from £201 million in 2017/18 to £237 million in 2022/23, in real terms. From the year preceding the HRA’s introduction to 2022/23, London boroughs will spend an extra £80 million as a result of anticipated increases in homelessness and the costs of managing these services.
In late 2018, London Councils and the London Housing Directors’ Group together commissioned LSE London to carry out research into funding requirements to sustain London borough homelessness services following the introduction of the HRA and in light of a changing funding, welfare and market environment. The authors also looked at how boroughs are approaching these challenges, with five case studies of best practice. The results will be used to inform London Councils policy and to inform discussions with central government in the context of the forthcoming Spending Review.