CIH warns councils ‘trapped in unsustainable cycle’ as temporary accommodation spend continues to rise

Local authorities are trapped in a cycle of escalating spending on short-term fixes, according to the Chartered Institute of Housing (CIH).

The release of the Local Authority Revenue Expenditure and Financing England 2024-25 data earlier this week showed councils in England spent £2.8 billion on temporary accommodation last year — an increase of 25 per cent in just 12 months.

Of this, £844m was spent on housing people in emergency B&Bs and hostels, which is often seen as the worst type of temporary accommodation for family households.

Rachael Williamson, the Chartered Institute of Housing (CIH) director of policy, communications and external affairs, said the figures showed, without policy change, councils would “remain trapped in an unsustainable cycle of escalating spend on short-term fixes”.

She said the government needed to tackle the rising costs driving homelessness, uprate local housing allowance to reflect private rents, and reform the temporary accommodation subsidy rate.

“The forthcoming Autumn Budget and homelessness strategy provide a vital opportunity to take these steps — families and children deserve safe, stable homes, not years stuck in temporary accommodation,” Williamson added.

>>See also: The strain of temporary accommodation: are local authorities’ innovative solutions enough?

The figures put local authorities’ net current service expenditure at £134.2 billion, a real-terms increase of £5.4 billion or 4.2% on the year prior.

Net current expenditure on homelessness services rose by 22.4 per cent in real terms to £2.2 billion, with a large component coming from nightly paid, privately managed accommodation, which increased by about £309 million to £620 million.

The CIH said there were practical steps that could be taken to address these issues, including reforms to ensure that local authorities are properly reimbursed for the true cost of temporary accommodation.

It also urged more resources for homelessness prevention, focused on early interventions like eviction prevention, tenancy support, and landlord mediation.