Homeless households Contents

1The scale of the homelessness crisis

1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Communities and Local Government (the Department) and the Department for Work and Pensions.1 We also took evidence from two local authorities—Bristol City Council and the London Borough of Hackney—along with the homelessness charity, Crisis, and the Local Government Ombudsman.

2.The extent of homelessness in England has risen significantly since 2010 and is now a national crisis. There are over 78,180 households, including 120,170 children, who are in temporary accommodation and Crisis estimates that 9,100 people are sleeping rough. Homelessness does not just mean people sleeping rough, but includes all people who do not have a home. There is also an unknown number of people who are neither sleeping on the street nor in temporary accommodation but are housed by friends and family in shifting circumstances. The Department is responsible for leading the Government’s response to homelessness and providing funding to local authorities, who are responsible for providing advice and assistance to homeless people in their area. The Department for Work and Pensions is responsible for the welfare system, which is an important safety-net to prevent people from becoming homeless.2

3.In 2015–16, local authorities spent over £1.1 billion preventing and tackling homelessness. The Department does not specify how local authorities should spend the majority of the funding they receive, or what outcomes they need to achieve with this funding. It encourages local authorities to intervene earlier with those who are at risk of homelessness, as prevention is both cheaper and results in better outcomes for homeless households. Local authorities’ spending on preventing homelessness peaked at £365 million in 2013–14, falling to £303 million in 2015–16. At the same time, spending on temporary accommodation has risen from £622 million to £845 million. Local authorities are finding it harder to provide advice and assistance that will effectively prevent people from becoming homeless, and are having to divert more of their funding into tackling homelessness after it occurs.3

4.There are many reasons why somebody could become homeless. However, the risk is greatest for people who are on low incomes, and earn these in areas which have a high degree of economic activity and are expensive.4 The Chief Executive of Crisis summarised the factors driving the recent significant increase in homelessness: the affordability of the housing in the first place; access to social housing; the access arrangement for private rented sector housing; and welfare reform and restrictions to that.5

The lack of effective action to address rising homelessness

5.All measures of homelessness have increased since 2010–11. For example, the number of children living in temporary accommodation has increased by 73%.6 Homelessness can have a devastating impact on the lives of those affected. Children who are living in temporary accommodation miss an average of 55 school days due to the disruption caused by moves.7 The number of people who are sleeping rough has been rising year-on-year since 2010, with 4,134 people sleeping on the street in 2016.8 The average age of death of someone who is rough sleeping is only 47, and people on the street are 17 times more likely to be the victims of violence than those in settled accommodation.9

6.The Department admitted that it had been aware that homelessness was increasing for some time but would not tell us when it first advised its ministers that that was the case.10 The Department told us that it was not surprised by the increase, and it had undertaken a range of work to respond to the increase. As part of this, the Department deliberately adopted a “light touch” approach to homelessness, in part to give local authorities flexibility in how they tackled homelessness in their area and also to allow the Department to focus on other initiatives.11 Similarly, the Department for Work and Pensions also expressed a lack of surprise at the growth in homelessness, suggesting it was a function of a lack of homes.12 Between 2011 and 2015 it has been estimated that only around half (54%) of the homes needed to keep pace with demographic change were actually built.13

7.The Department has accepted that the rise in homelessness and lack of affordable housing meant that its light touch approach has failed and that it needs to do more to tackle homelessness. The Department now has a target of halving rough sleeping by 2022 and abolishing it by 2027.14 To support the delivery of this target, it told us that it is now “much more closely involved in working with local authorities, overseeing what they do and supporting them.”15 The Department told us that it works closely with the Department for Work and Pensions to tackle homelessness.16 The Department also argued that the new Homelessness Taskforce would lead efforts across government. The Department also accepted that in the past, when homelessness was at its height, a concerted government strategy with targets was key to bringing about action to reduce homelessness.17 Homelessness is likely to increase further unless and until the government takes significant action to address it. We heard that over the next ten years, if the current trajectory stays as it is, the 160,000 people who are homeless in a year could increase by 25% and the 9,100 people sleeping rough could rise by 76%.18

Housing options available to those who need them

8.All of the written evidence submissions and our pre-panel of experts pointed to the impact of welfare reform on homelessness, particularly when combined with increased rents in the private sector and the proportion of people on housing benefit. The National Audit Office (NAO) found that “changes to Local Housing Allowance (LHA) are likely to have contributed to the affordability of tenancies for those on benefits, and are an element of the increase in homelessness.”19 Private sector rents have continued to rise despite LHA being capped and frozen, meaning people are being priced out of the private rented sector.20 The gap that has opened up between the amount of financial support provided to people through LHA and the cost of renting in the private sector has limited the number of properties that households can afford. In some markets the average rent is massively out of reach for people on LHA.21 We heard that, in Bristol, the average rent for a three-bedroom house in the private sector is £1,200 per month whereas the money available through the LHA is £780, meaning households face a shortage of £420. We were also told of concern about the potential impact that the introduction of Universal Credit will have on homelessness.22This will mean that private landlords will no longer be paid directly by the Department for Work and Pensions for tenants who receive Housing Benefit. Witnesses suggested that this will reduce their willingness to let to tenants in receipt of benefits.23

9.Local authorities have a statutory duty to house people whom they accept as homeless. Often they have very few options available to them for housing homeless people and find it increasingly difficult to provide temporary accommodation to homeless households because of both lack of supply and rising demand. This lack of supply is in part the result of the reduction of social housing stock that has occurred in recent years, between 1980–81 and 2013–14 almost two million homes were sold under the right to buy,24 and the low levels of construction of affordable housing that have occurred over the same period.25

10.The options available to local authorities for housing homeless people are further reduced by the apparent lack of willingness of both private sector landlords and housing associations to let their properties to tenants in receipt of benefits. Shelter’s survey of private landlords found that 6 in 10 landlords either bar (43%) or prefer not to let to (18%) renters claiming housing benefit. A quarter of landlords said the freeze in LHA made them less likely to let to people in receipt of housing benefit.26 Private landlords are concerned that if they let properties to tenants in receipt of benefit their income will be unstable, and will not rise in line with the market value of their properties. The Mayor of Hackney told us that in his borough rents have increased by 47%. At the same time, due to the freeze on Local Housing Allowance, the amount of funding available for residents to support this rent rise has only increased by two percent.27

11.This issue is not isolated to the private rented sector: the Chartered Institute for Housing told us that nearly half of the housing associations they surveyed said one of the main reasons they would refuse a council nomination to a tenancy was households being unable to pay their rent due to limited welfare entitlement.28 One in four people in receipt of housing benefit is living in private-rented accommodation, and will spend on average an additional £50 a week in London to meet the rent. The Department for Work and Pensions characterised this as a choice: “all the ones above [the LHA] are choosing to do that … We do not go around telling people what they can and cannot rent”.29 We were entirely unconvinced by this assertion given that the reality for people is that they have to pay market rent and there can be little choice in what housing is available to them.30

12.A consequence of the limited options available to local authorities is that homeless people might be placed in temporary accommodation while awaiting a permanent home. This temporary accommodation can be of very poor quality. The Local Government Ombudsman (LGO) told us that “the area over which we have the greatest concerns, is around the continued use of unsuitable temporary accommodation. … [we reported on] a family who have two young children and were living for 26 weeks in one room in a hostel that was infested with cockroaches. That is typical”.31 There is a statutory six-week limit for families to be kept in temporary accommodation with shared facilities, but we heard of a case where a family had to live in a bed and breakfast for two and a half years.32

13.Bristol City Council told us that the majority of its temporary accommodation is nightly purchased self-contained units, while the Major of Hackney told us that that it is opening hostels because the private rented sector is too expensive for homeless people to afford otherwise. We also heard that there are some accommodation providers which are set up specifically to attract income from housing benefit, and may be exploiting the homeless people who live in them. Bristol told us of its concerns about hostels operating in its area: “[they are] not subject to the same scrutiny and we do not nominate to [them], but they still fulfil a purpose … it is very difficult to say to people, “You’re better on the street or in a tent in a park than in some of the private sector hostels.””33

The need for effective joint working

14.We heard repeated evidence that better joint working between different government departments is needed in order to tackle homelessness effectively. While the Department for Communities and Local Government and the Department for Work and Pensions told us that they work together to assess the impact of welfare reforms, they have yet to assess the impact of recent changes to LHA have had on homelessness. Similarly, while the Department has established a forum to encourage government department to work together to reduce homelessness, this only met three times between 2015 and 2017.34 The need for a stronger cross-government approach was clear from the written submissions we received. Shelter told us that a cross-government approach to reducing homelessness is essential,35 while the National Housing Federation told us “if we are to seriously tackle homelessness departments must work with each other to ensure that its policies are complementing, not undermining, their ambition”.36 The Department acknowledged that it needed to discuss changes in government policy with other affected departments so that any wider impacts can be taken into account.37

1 C&AG’s Report, Homelessness, Session 2017–19, HC 308, 13 September 2017

2 Qq 51, 74–75, 123, C&AG’s Report, paras 1–2, 1.20

3 Qq54, 66, 76, 126, C&AG’s Report Figure 8

4 C&AG’s Report, para 8

5 Q45

6 C&AG’s Report, para 1.7

7 Written Evidence xx (Zacchaeus 2000 Trust) para 29

8 C&AG’s Report, para 1.7

9 Q66

10 Q87

11 Qq 79–83

12 Q153

13 C&AG’s Report, Housing in England: Overview, Session 2016–17, HC 917, 19 January 2017

14 Q121

15 Q78

16 Q140 & Q141

17 Q121

18 Q51

19 C&AG’s Report, para 11

20 Q54

21 Q47–48

22 Shelter (HML0001) para 37

23 Q50

24 C&AG’s Report, Extending the Right to Buy, March 2016

25 Q 45, C&AG’s Report, para 2.3

26 Shelter (HML0001) para 11–12

27 Q 46

28 Chartered Institute for Housing (HML0007) page 2

29 Q154

30 Q157

31 Q57

32 Q56

33 Q61

34 C&AG’s Report, para 3.8

35 Shelter (HML0001) para 2

36 National Housing Federation (HML0005), pages 1–2

37 Q90

18 December 2017