“Unfreeze the temporary accommodation subsidy”

As we have written before the freeze of the Local Housing Allowance is one of the key factors driving the financial crisis of some councils, especially, though not exclusively, district councils. We reproduce here Emma Taylor-Beal’s speech to Worthing council on the temporary accommodation crisis. Emma is the Cabinet member for Housing.

Ahead of the 2023 Autumn Statement, 158 Councils, including ours, attended a summit of the District Councils’ Network (DCN) to discuss the rapidly increasing scale of temporary accommodation. In total 104,000 households are in temporary accommodation nationally, an increase of 62% in the past 5 years, driven by a fundamental failure of the housing market. Subsequently a letter, signed by 119 Councils of all colours, including our own, was sent to Government ministers, as a desperate plea for urgent interventions to address the increasingly perilous financial position local authorities find themselves, in meeting their statutory obligations.

Unfortunately the desperate pleas of 119 councils fell on deaf ears in relation to 5 out of 6 of our requests. Most worryingly, the temporary accommodation subsidy will remain capped at 90% of the 2011 rates. What else can you think of that is still priced the same as 2011? Since 2011 the cost of a first class stamp has gone up by 172%, a pint of beer by 54%, whilst the cost of housing in the south east has increased by 80%. So how are we supposed to survive on a subsidy set at 2011 levels?

To put this into context as an interim estimate for this financial year, we will have 360 households in temporary accommodation. For this year the projected cost of these placements is approaching £6m (£5.7m) yet the government subsidy will at the very best be close to £2m (£1.8m) leaving a £4m (£3.9m) gap that we have to fund locally. This represents close to a third of our total budget and is simply not sustainable. On top of this they dictate how much money we charge households who stay in temporary accommodation so even if they could pay more we are not allowed to charge it. Our example is replicated around the country, local authorities are being starved of the funds required to deliver their statutory services. We need this subsidy to be unfrozen and brought in line with the actual cost of us housing people.

I will end by saying that being a local authority under a Tory national government is like being in a financially abusive relationship where they use money to control our behaviour and then gas light us by blaming us when we struggle to do what they legally require of us.