Introduction and summary
- Homeless Link is the national membership organisation charity for frontline homelessness services. Representing over 800 organisations ranging from Housing Associations, supported accommodation providers and hostels to day centres, night shelters and outreach, we work to improve services through research, guidance and learning, and campaign for policy change that will ensure everyone has a place to call home and the support they need to keep it.
- We are pleased to provide our submission to the Public Accounts Committee inquiry on tackling homelessness and welcome the subject of the inquiry, as we look to work with the new Government to deliver on shared goals of getting back on track to ending homelessness.
- This submission focuses on the impact of the current funding model on homelessness services, the impact on people experiencing homelessness and our understandings of the costs and efficacy of the current system.
- The homelessness system delivers amazing work every day to support some of the most vulnerable members of our community. But the current system of funding to enable this work undermines these efforts, threatening the sustainability of services and diverting resources away from support. The complicated and patchwork funding network means it is not possible to ascertain value for money, and there is no quantified value to the current level of spending.
- Funding models have increasingly become detached from strategy undermining stated goals and objectives.
- Homelessness support providers are needed now more than ever. All forms of homelessness are rising, with record numbers of people living in temporary accommodation and rough sleeping rates rising at its fastest rate since 2015. But the services designed to support people are themselves in crisis, chasing short-term and insufficient funds with no ability to plan strategically into the next financial year. This combination of pressures has left the system on the brink of collapse.
- History shows us that things do not need to be this way. By building a clear picture of the current spend on homelessness, the new government can regain control of spending and strategically re-invest into support that works. Establishing secure, long-term and comprehensive funding will allow the whole system to plan strategically. Doing so will support a move away from cycles of crisis, allowing services to work more proactively and ultimately reduce the number of people pushed into homelessness in the first place.
- This paper outlines the key issues with the homelessness funding model and highlights the actions the new government should take to get back on track to ending homelessness. Unless steps are taken to systematically review the funding needs of homelessness services, the system will continue to fail those it is designed to support.
Current spending on homelessness
The system being funded
- The homelessness system in England is made up of a mix of statutory and non-statutory support services designed to prevent and end homelessness for families and individuals. There is a huge diversity of people who access homelessness support, ranging from those whose homelessness stems purely from a lack of affordability, through to people experiencing severe and multiple disadvantage who may have significant health and social care support needs.
- These services are often the last line of defence for people who have fallen through the gaps of other public services including mental health, social care, and the justice system. Services delivered within the homelessness system include: local authority Housing Options services; commissioned and non-commissioned accommodation including supported accommodation, hostels and emergency accommodation; tenancy sustainment services; rough sleeping outreach services, and specialist support interventions for associated support needs including mental and physical health, substance use, domestic abuse, education and employment.
- Under Part 7 of the Housing Act 1996, a person is defined as homeless if there is no accommodation available for them to occupy or if it is not reasonable for them to continue occupying their current accommodation.
- There is no obligation for local authorities to house everyone experiencing homelessness. They must instead determine what action they take based on the facts of each individual case, assessing whether someone qualifies as homeless or threatened with homelessness and if so, whether they are eligible for assistance based on immigration and residence status in the UK.
- Prior to 2018, local authorities’ duties were focused on the provision of temporary accommodation to homeless households deemed as being in ‘priority need’. The introduction of the Homelessness Reduction Act 2017 (HRA) extended these statutory duties, bringing in ‘prevention’ and ‘relief’ duties. All households owed a duty under the HRA qualify for some level of support, regardless of priority need status. However, it remains the case that local authorities’ duty to accommodate is only triggered for households in priority need.
- For those households found in priority need and owed a ‘main duty’ the local authority has a statutory duty to accommodate. Over the long term the duty is typically discharged once the household is offered social housing. Until then the local authority is obliged to accommodate them in temporary accommodation.
- For households not categorised as in priority need, accommodation and support is primarily delivered through the ‘non-statutory’ homelessness sector. The bulk of this provision – including many services run by Homeless Link members – is delivered through the voluntary sector, Housing Associations, and community and faith-based organisations. These providers frequently deliver support under commissioned government contracts but may also rely wholly or in part on alternative income such as Housing Benefit, fundraising, and private grants. This outlined further throughout this submission.
- Statutory homelessness funding including the Homelessness Prevention Grant covers the provisions necessary for local authorities to meet their duties under the HRA. This includes local authority housing options support for households owed a prevention or relief duty and the provision of temporary accommodation for eligible households. Rising temporary accommodation costs have seen increasing proportions of funding channelled to meeting these costs, meaning fewer resources to support those without an accommodation duty.
Quantifying the spend
- The current scheme of spending on homelessness is extremely complex. Funds have by and large been developed in response to crisis, rather than as part of a coordinated response to prevent and end homelessness. The system is therefore funded through a patchwork of different funding schemes, creating roadblocks when trying to quantify the current overall spend.
- The previous government announced their headline spend on homelessness and rough sleeping as £2.4 billion over three years, including £1.2 billion Homelessness Prevention Grant funding, funding commitments laid out in the ‘Ending Rough Sleeping for Good’ strategy, and multiple subsequent ‘top ups’ and ‘boosts’.[1]
- However, in an echo of 1997’s General Election, the precise figure currently being spent on relieving homelessness is not currently available. Many non-statutory ‘exempt’ supported accommodation services are funded through Enhanced Housing Benefit. While there is no accurate breakdown of current spending on exempt accommodation, estimates place this at around £1.9 billion of additional funding based on 2016 spending levels.[2]
- The recent report from the National Audit Office attempted to quantify spending on homelessness across government.[3] In doing so, they showcased the complexity of current funding arrangements. Funding pots are varied, with different timelines, changeable values and a lack of coordination or strategic oversight.
- The analysis found that funding was ‘fragmented and generally short-term, inhibiting homelessness prevention work’ and that DLUHC (now MHCLG) could not ‘demonstrate that it is delivering optimal value for money from its efforts to tackle homelessness’.[4] While NAO’s report found £2.44bn was spent on homelessness services, this is exclusive of the unknown figure also spent on non-statutory exempt accommodation services, meaning the total figure is likely to be significantly higher.
- Despite this significant and varied spend, local authority spending on homelessness has increased 113% in real terms since 2010/11. Spending on homelessness now represents 60% of the total gross expenditure on housing services, up from 25% in 2010/11. Spending on temporary accommodation alone has risen to £1.63 billion, representing 40% of the total spend on housing services. These spiralling costs have put many local authorities at risk of bankruptcy.[5]
Exempt accommodation and Enhanced Housing Benefit
- Often missing from considerations of the overall costs of the homelessness system is the spend made from DWP through the delivery of exempt accommodation – which currently makes up a significant proportion of the homelessness supported accommodation provision. Exempt accommodation is a term used in Housing Benefit regulations which allows providers of supported housing to collect higher rates of Housing Benefit known as Enhanced Housing Benefit. Exempt status was established to support the activity of Housing Associations and VCSE accommodation providers in recognition of the higher cost of managing supported housing and to account for Intensive Housing Management.[6]
- Exempt status is primarily used by VCSE providers and Housing Associations, including many of our members, and encompasses many high-quality services. For these, the ability to collect higher rents is often instrumental in their ability to deliver support and maintain financial viability. In recent years, however, an increasing number of bad actors have stepped into the sector to take advantage of the exempt accommodation loophole and the low level of scrutiny placed on providers. Unscrupulous providers across the country have purchased properties and begun delivering non-commissioned ‘supported’ accommodation at ‘excessive profits’.[7] Such providers will deliver limited to no support while collecting income directly from the Housing Benefit bill. The state and scale of low-quality exempt accommodation ‘shocked and alarmed’ the LUHC committee who described the system as ‘a complete mess’.[8]
- The LUHC committee inquiry into the cost of exempt accommodation reported the money spent on exempt accommodation was ‘not readily available and to provide it would incur disproportionate cost’.[9]
“The SAR [Supported Accommodation Review in 2016] estimated that £2.15 billion was spent on ‘specified accommodation’ across Great Britain. No further breakdown was provided, but as 89% of people in specified accommodation are in exempt accommodation, it is probable that a significant proportion of this is spent on exempt accommodation.”10
- What this means is that although the headline costs of homelessness spend by Treasury is currently £2.4billion this does not include the presumed billions being spent on Housing Benefit for exempt accommodation. DWP are not able to provide a figure of what is being spent at current, nor estimate what proportion of that money is spent on homelessness specific exempt accommodation, nor of which is on poor-quality provisions.[10]
- In an echo of 1997, the reliance on Housing Benefit has meant restrictions on the type of support provided, limitations on strategic development and a lack of systematic oversight.
Temporary accommodation crisis
- The rapid increase in households owed a main homelessness duty and the spiralling cost of delivering temporary accommodation has left local authorities on the brink of collapse. The number of households in temporary accommodation rose to 117,450 in April 2024, a 12.3% increase on the previous year and the highest number since records began.
- Local authorities’ spending capacity on temporary accommodation is further compromised by the means used to recover costs. Under the current system, local authorities pay upfront for temporary accommodation and reclaim the cost as a subsidy from the DWP. Reimbursement rates are laid out in legislation and are calculated based on the January 2011 LHA rate.
- The freeze on subsidy rates at 2011 levels was set to control welfare expenditure. The significant inflation in rental costs since 2011 means that subsidy rates have fallen significantly behind actual costs. This gap is known as the ‘Temporary Accommodation Subsidy loss’. Local authorities reported losing £204.5 million in 2022/23 because of the shortfall, with some spending up to half of their total net budget on temporary accommodation as a result.[11]
- While temporary accommodation is a necessary measure in cases of emergency, its widespread use comes at huge cost to the wellbeing of those who live there. Conditions are often poor, with shared facilities, cramped rooms and no access to basic cooking or washing facilities.[12] The lack of permanent, affordable housing to move on into means people remain in temporary accommodation for long periods, often months or years.
- This has resulted in a bed-blocking effect, as the number of beds being freed up by move-on falls short of the number of new people owed a main homelessness duty. This has led to councils’ increased use of expensive and unsuitable B&B accommodation. The Local Government Association (LGA) found half of local authorities did not feel confident they would have ‘enough funding to fulfil their legal duties’ in 2024/25,[13] and the cost of temporary accommodation meant one in five councils was ‘very or fairly likely’ to issue Section 114 notices in the near future.[14]
The knock-on impact to single homelessness
- For many local authorities, the rise in costs associated with meeting statutory homelessness duties has pushed them to the edge of bankruptcy. Many are scaling back support in other areas – including services for non-statutory homelessness meeting the needs of rough sleepers and other people not eligible for the main duty despite experiencing homelessness - to cover the cost of temporary accommodation. This squeeze has led a growing number of homelessness services focused on ‘single homelessness’ to see commissioned contracts cut or their services decommissioned altogether as local authorities focus resources on meeting their legal duties.
- These cuts have reduced activity across homelessness prevention, rough sleeping outreach, and supported accommodation. Some areas have ceased or propose to cease contracts for non-statutory homelessness services altogether.[15][16] This means quality services closing down, hundreds of beds removed from the sector, and few alternative options for those who rely on services for support and accommodation. Examples of this can been seen around the country including in Devon, Hampshire, Leicestershire and Newcastle.
The impact on single homelessness
- The sixteen years since the removal of ringfencing on Government homelessness funding has seen support contracts slashed and has meant many accommodation providers have seen their primary source of income shift to Housing Benefit. Homeless Link members described the challenge of delivering effective homelessness support while working beneath Housing Benefit regulations as ‘dancing on regulatory pinheads’.
- As VCSE providers struggle to maintain standards beneath restricted funding, the sector has grown increasingly vulnerable to exploitation. Members report an increase in private, for-profit providers moving in to deliver supported housing with little consideration of the quality or consistency of support.[17]
- Overall, the picture is one of a traumatised system,[18] so deeply impacted by cuts and shortfalls that it is unable to meet its purpose in ending homelessness. Changes to funding systems means support has been forcibly deprioritised, with providers left to deliver ‘intensive housing management’ i.e. maintenance of property. The shift in focus had gutted providers’ ability to deliver effective support and left numerous providers to describe their own services as ‘inadequate’.
Funding for accommodation providers
- In our 2023 Annual Review of Support for Single Homeless People in England, accommodation providers spoke of the shift in their income streams across the last 10 years. 36% cited Housing Benefit as their main source of income, a steep jump from just 13% in 2012. And of this 54% cited Enhanced Housing Benefit as their main source of income. Overall Housing Benefit is now the main source of income across the sector, increasing 200% overall in 10 years, and 620% since 2010 and the start of austerity and associated local authority cuts.
- Across the same period, local authority commissioned funding has reduced significantly. While 76% of providers cited this as their primary source of income in 2013, this has now dropped to just 25%.
- The cost of delivering integral homelessness services has not disappeared from the treasury but the budget has shifted from local authorities to DWP leading to the knock-on impact of unregulated, fragmented, and insufficient provision as set out in this submission.
- While current commissioned funding streams often pay for essential support activity, shorter funding windows can mean they are perceived as less stable than Housing Benefit income.
- Providers also report significant challenges in affordability. Those in receipt of local authority commissioning have seen contract values remain largely static in recent years despite sharp rises in inflation. Many have ramped up private grant applications through trusts and foundations or fundraising activity to meet their core delivery costs, but describe this as leaving them vulnerable to market changes. The cost of living crisis has seen individual giving and grant fundraising drop significantly for some providers, all while the cost of delivery has risen. As services struggle to make up the shortfall in Government contracts, many have been forced to reduce the scale of their delivery and, in some cases, to close services altogether, with the latest data from Homeless Link members showing 19% of providers have already reduced or closed services, and 47% at further risk of doing so.
- In addition to larger contracts such as RSI, many services fund support activity through smaller grant funding. These are usually tied to smaller government contracts or to trusts and foundations, and are often delivered on particularly short cycles of around 12 months.[19] Chasing small funding pots can take up significant resources, particularly for smaller organisations, and funds often favour new or innovative projects over day-to-day delivery. This can have serious impacts on the continuity of care, with staff moving between temporary contracts and changing roles to match whatever funding is available.
Fundraising holistic support
- The push towards Housing Benefit as a primary income source provokes distinct challenges in the delivery of holistic support. Such provisions include services such as floating support, employability and support with intersecting needs such as substance use or domestic violence. While these services can be instrumental in breaking the cycle of homelessness by addressing its root causes and helping someone settle in their community, they fall beyond the remit of Housing Benefit. This means people moving on from supported housing face a steep cliff edge in support and has resulted in many successful services closing as providers are pushed to focus their resources into accommodation.
- The shortage of holistic funding streams raises particular challenges for smaller non-accommodation providers such as day centres or outreach support. A survey of Homeless Link member day centres showed their primary funding came from a combination of grant funding, individual giving and other fundraising activity.[20] These services frequently act as a first point of contact for people at risk of homelessness and can provide essential services like food, clothing or company to those who may otherwise be unable to access support.
- But despite the essential role they play in the homelessness ecosystem, many have faced significantly reduced funding and cost pressures that have forced them to reduce their service or, in some cases, close altogether. Holistic services delivered by larger-scale providers are often first to be cut in efforts to reduce spending. Many smaller-scale or independent providers have seen their donation income decrease in light of cost-of-living pressures. This has coupled with an increasingly competitive small grant environment, inflated delivery costs and higher demand for crisis support, and has left many smaller providers at risk of closing altogether.[21]
Key challenges of the current system
- After years of poorly-planned and increasingly unsustainable funding, the homelessness sector is in crisis. As many as 19% of our members have already reduced or closed services, and 47% at further risk of doing so because of financial viability, and an increasing number have faced outright funding cuts from their local authority. Our members report an overall lack of strategic financial coordination that stems from central Government. Despite delivering services on their behalf, charities are forced to waste significant time and resource chasing insecure funding to cover shortfalls and funding gaps, at the expense of planning and coordination. The result is a network of services forced to hop from crisis to crisis, vulnerable to market changes and unable to address the root causes of homelessness among the people who turn to them for support.
- The inability of services to move beyond crisis responses means a revolving door of clients who return ‘year after year’ with homelessness driven by unresolved support needs, all while cost pressures push an ever-increasing number of people into homelessness for the first time. Services are now working within an unsustainable norm, with rough sleeping numbers rising rapidly, caseloads far beyond their intended capacity, and rising levels of overall need causing more people to become trapped in preventable cycles of homelessness.
- The widespread impacts of the current broken funding system begin at the highest level, with services unable to conduct common-sense business planning more than a year or two in advance. Cost-focused commissioning approaches trickle down into service delivery and the homelessness workforce. Most tragically, this impacts people experiencing homelessness themselves, who are too often forced to rely on services that cannot deliver the support they need. The overall picture is one of crisis.
- In addition to these structural issues, the sector is currently processing what recent announcements made by the new Government in the October 2024 budget will mean for homelessness services, and urgently seeking further clarification and support. Homeless Link had been calling for clarity around a rollover of existing grant funding programmes in next financial year providing the financial certainty organisations across the country need, whilst using this time to develop a more holistic, sustainable funding model that helps prevent and end homelessness for all.
- The Homelessness Minister has yet to clarify the detail of what an additional £233m of additional spending in 2025-26 on homelessness will look like, whether it will be a new funding stream or absorbed into existing programmes, and what this means for the future of the Rough Sleeping Initiative, the Rough Sleeping Accommodation Programme, the Night Shelter Transformation Fund and other current funding streams. If services do not get an answer to this over the next few weeks, many will be forced to start the process of redundancies and service cuts.
- There is concern that even appreciated the want to develop and deliver a new funding model there is not the time to do this in an informed way in this financial year in order to be ready to meaningfully and effectively commission new contracts and safeguard against the loss of existing services.
- Furthermore, other measures announced in the Budget, most notably the proposal to increase employer National Insurance rates, are compounding the issues of years of underfunding and pose an immediate threat to the viability of already-struggling homelessness services. We estimate that the NI changes alone could take between £50 and £60m out of the homelessness sector and away from the delivery of frontline services. Without an exemption, rebate or relief for the homelessness sector to cover the additional costs of National Insurance, we will see imminent closures and loss of further bed spaces and support. This would seriously undermine the Government’s commendable longer-term effort to develop a cross-departmental Homelessness Strategy and deliver a new funding system. At the very least, Ministers must require MHCLG and local authorities to cover the increased costs to homelessness services delivering services on behalf of the public sector, by increasing the value of grants and contracts for 2025/26 onwards accordingly.
- Without a long-term plan to fund a system that works, the homelessness sector will continue to be pushed past breaking point. It is therefore extremely welcome that the Government has now committed to a cross-departmental homelessness strategy, and will be prioritising reviewing homelessness spending across departments for 2026 onwards. We look forward to working with the Government to developing the new homelessness strategy and delivering a sustainable funding model that works for all.
- It is vital that the Government collaborate with the sector in the development of the new model, and that the future funding system is developed alongside the strategy and that they are integrated to ensure that the intended strategic objectives and goals are adequately and appropriately resourced.
- Historic homelessness and rough sleeping strategies have increasingly been detached from the total funding environment which has undermined intention and contributed to unsuccessful delivery.
- It is also essential that, while developing the model for reform, the Government does not allow the current system to fall over completely in the short term. These services are needed now, to continue providing support and accommodation to thousands of vulnerable people, and to provide the foundation for future strategic efforts to end homelessness.
Overreliance on Housing Benefit
- Quality support is the key to ending homelessness. Specialist providers are set apart by the support they deliver. Forcing charities to pay for staff time and support costs out of accommodation-focused Housing Benefit income fundamentally misrepresents the role that services play for those who access them. For many experiencing homelessness, a roof over their head is the first step on the road to recovery – but it is high-quality, person-centred support that unlocks a sustainable move on from homelessness.
- Our current funding system works against this. Funding is channelled into maintaining the bricks and mortar of a property rather than supporting the people who live within it. This has created a system ripe for exploitation by those whose only motivation is profit. The exempt scandal has placed this into the spotlight, with an alarming amount of accommodation delivered without regard for quality nor safety while collecting money directly from the public purse. The LUHC committee described current funding regulations as ‘a licence to print money to those who wish to exploit the system’[22] – while the people unfortunate enough to be housed in such schemes live with the lasting damage and trauma they can cause.
- The historic lack of oversight in the sector has left the system ‘a complete mess’, and it falls to the new government to unpick this. This work has already begun, with the Supported Housing (Regulatory Oversight) Act offering a promise of change within the sector. But in a support-focused system, exempt status would not be required and this crisis would not exist.
- While it is not clear how much money is currently spent on exempt accommodation, the system is clearly generating huge inefficiency and waste. The new government can regain strategic oversight of spending by quantifying the existing Housing Benefit spend and redistributing funds to deliver better investment, higher-quality services and improved outcomes for those who live in them. To achieve this, the focus of funding must shift away from bricks and mortar and onto the provision of high-quality, consistent and person-centred support.
Short-termism
- As previously outlined, many of our members receive some portion of their funding through Government funding streams. One of the core criticisms of the current funding model is the short-term nature on which funding is commonly allocated. Contracts are generally awarded on a short-term cycle with little consideration of the impact this has on service delivery.
- The most prominent example of this is RSI funding. While welcomed as a necessary injection of funding when it was first introduced in 2018, providers were critical of the challenges posed by its initial one-year funding cycle.[23] Single-year contracts made it impossible to reliably forecast more than a year in advance, leaving little space for strategic planning and coordination. Services were left handing out fixed-term contracts to staff, driving high staff turnover and anxiety among the workforce. Providers were often not told of the outcome of new contract bids until April or May of the financial year, meaning they were forced to take the risk of covering delivery costs from reserves based on their anticipated funding.
- After significant lobbying from the sector, Government announced that the 2022-25 RSI funding would be allocated on a 3-year basis. While this was a welcome change, providers maintain that the three-year cycle is still not long enough. As the end of the funding period draws closer, with no clarity or guarantee of a rollover provided since the Autumn Budget 2024, members report feeling they are again on a funding cliff-edge with no certainty about their future viability.
- There is not sufficient time in this current financial year to develop and deliver a new funding model to be rolled out ahead of 2025-26. It is critical that a transitional period is embedded that safeguards the current service provision whilst allowing for the careful consideration that is needed to develop a more effective, transparent and efficient funding model that is informed by strategy.
Race-to-the-bottom approaches
- Even for those with relatively secure local authority contracts, commissioned contract values have increasingly fallen behind the cost of service delivery. We have heard from our members that despite headline announcements of new funding from Government, service-level funding has largely remained static in recent years. Many services have seen real-terms or actual cuts to their budgets, despite inflation-driven rises in the cost of service delivery and an increase in both the number of people requiring support and the severity of need they require support with. Services describe being expected to deliver more for less, all at the cost of their service quality.
- The financial shortfalls in homelessness funding have also driven a cost-first approach to commissioning. Members describe losing contracts – often for services that they have provided for years – because lower-quality providers are able to offer to deliver them cheaper but in doing so sacrificing better outcomes. Tendering culture can pit local organisations against one another, with a number of providers chasing the same grants and winning out based on who can offer to deliver it the cheapest. Providers spoke of their frustration, both at the cost of contracts and the culture of competition that this fosters:
“Sometimes the price of a contract is so low you know you can’t afford to tender for it. We are all aware these types of procurement practices kill collaboration and collaboration is what solves homelessness for people.”
- The culture of ‘race-to-the-bottom’ commissioning in homelessness drives the quality of services and support down as providers try to fit their service standards around what funding is available. This can make the effective implementation of high-quality support almost impossible. The basic principles of trauma-informed care require both time and strategic oversight to embed, with staff supported and trained to move away from crisis management. Without the ability to effectively horizon-scan, retain staff or offer sufficient support time to each resident, services instead remain trapped responding to crisis after crisis. This, in turn, prevents the effective support and recovery for people supported by the service, preventing recovery and perpetuating the long-term traumas of homelessness.[24] All of this leads to ultimately driving up the costs to the public purse: not only through homelessness provision because of the protracted length of time people risk being trapped in homelessness, but also on wider public services including health, mental health, social care and criminal justice as the impact and trauma of homelessness takes hold.
Impact on workforce
- The homelessness workforce has suffered shortages in recent years caused by low wages and high rates of burnout. The Homeless Link Workforce survey,[25] completed in June 2022, showed that workers are driven by a desire to make a positive difference, but that low wages and challenging workloads are driving people away from the sector. Only 28% of respondents felt frontline staff were appropriately paid, and workers who remained in the sector often did so in the knowledge that they could earn more elsewhere. The effect is an ‘unsustainable’ reliance on ‘good will and passion’.[26]
- Frontline workers, who provide much of the flagship support for homelessness organisations, are generally the lowest paid among the workforce and the most likely to be exposed to trauma and burnout. Charity leaders have spoken to us of their intentions to fairly compensate staff but emphasised the limited resources available to do so. Low wages were portrayed as a symptom of the homelessness commissioning culture. Contracts have very fine margins on staff costs, making competitive pay challenging to deliver, with frontline wages often only slightly above minimum wage. Because wages are so supressed, they are often lower paid than entry-level positions in supermarkets, and leaders report difficulty in delivering attractive job conditions to retain workers under current contracts.
- The overall result of workforce pressures has been a self-perpetuating cycle of staff shortages. Understaffing rarely means a reduction in the number of people supported. Instead, the same number of clients are shared across a smaller pool of support workers. As demand for services rises, workers are increasingly asked to take on additional cases, reducing the quality and intensity of support they can deliver while increasing the pressure associated with a higher caseload.
- The high staff turnover driven by unstable funding can be destabilising at best and retraumatising at worst, with trusting relationships becoming less feasible as residents are shifted between workers or left worrying if staff will leave. Funding culture drives services to give high caseloads to low-paid staff, who are left not only ‘trying to support people with higher levels of needs than they are equipped to cope with, but they are also often doing so under constant threat of redundancy’. This drives high turnover and burnout across the sector. For people experiencing homelessness, ‘without continuity of staff, there is neither opportunity nor motivation to build any sort of relationship’.[27]
Impact on people experiencing homelessness
- Ultimately, it is people experiencing homelessness who are most impacted by the negative outcomes of homelessness funding. In many cases, the structure of the homelessness system means people remain in situations of homelessness for longer than necessary. Cliff-edge funding can undermine evidence-based approaches such as Housing First or trauma-informed care, which rely on unconditional support for as long as a person needs it.
- At its worst – yet all too often – the system can re-embed the traumas of homelessness. Forced to turn to services for support, an increasing number of people are being met with closed doors. Funding gaps mean that services may be unable to extend support to anyone beyond a core cohort of rough sleepers. For some, service closures may mean that support and accommodation services are simply absent, leaving people with no options to turn to. Even when able to access support, many are met with services that are delivered in precarity, with an unstable workforce and uncertainty about the future. In the worst cases, services can be actively damaging, fail to meet even minimum standards of care and support while collecting huge profits straight from the Housing Benefit bill.
The right time for change
- The homelessness system cannot continue as it is. While fantastic work happens across the system every day, this is done in the face of significant hardship. Patchwork funding and financial shortfalls leave providers across the sector vulnerable to crisis. Systemic underfunding has combined with exceptional financial pressures to leave providers drifting from one emergency to another while trying to remain afloat.
- The challenges are rooted across the system as a whole. The cost of delivering temporary accommodation has left local authorities with little choice but to pull resources inward to meet their statutory duties, but this comes at the expense of non-statutory homelessness. Services have done all they can to balance the books and are running out of things to cut without undermining the safety of their services.
- Inadequate services perpetuate homelessness: they trap people in cycles of engagement and disengagement, keep people held in situations of homelessness longer than necessary and can cause significant harm. Delivering services below cost forces inadequacy, and in doing so delivers very low value for money. Higher quality, localised services have been pushed out of the market as services are granted to the lowest bidder. The false economy of these services has taken precedent over delivering what works.
- History shows us that change is possible. Radical changes to sector funding have taken place before, and they have delivered cost-effective services that have changed the lives of thousands. We celebrate that the new Government have already made positive indications about their willingness to reevaluate the system and its funding and work with providers to redesign a system that works. It is now essential that they take the time to get this right, working closely with experts across the sector. They must also provide immediate short-term relief by rolling over key funding streams like RSI as part of a transition phase, and mitigating the impacts of NI changes on homelessness services, so that they can continue supporting people during this transitional period and stand ready to play their part in the new system from 2026 onwards.
November 2024
Homeless Link 2024. All rights reserved.
Homeless Link is a charity no. 1089173 and a company no. 04313826
[1] House of Commons (2024). Homelessness and Rough Sleeping Funding. HC 746. 28th February 2024; House of Commons (2024). Rough sleeping and homelessness. HC 746. 4th March 2024.
[2] Davies, G (2022). Letter from the Comptroller and Auditor General to the Chair of the LUHC Select Committee. GF 1370 22, 27th July 2022. Available at: https://committees.parliament.uk/publications/28518/documents/172215/default/
[3] National Audit Office (2024). The effectiveness of government in tackling homelessness. 23rd July 2024.
[4] Ibid.
[5] National Audit Office (2024). The effectiveness of government in tackling homelessness. 23rd July 2024.
[6] Crisis (2021). Crisis Policy Briefing: Tackling problems with exempt accommodation. October 2021.
[7] Levelling Up, Housing and Communities Committee (2022). Exempt Accommodation Report. 19th Oct 2022 HC 21.
[8] Ibid.
[9] Ibid.
[10] Davies, G (2022). Letter from the Comptroller and Auditor General to the Chair of the LUHC Select Committee. GF 1370 22, 27th July 2022. Available at: https://committees.parliament.uk/publications/28518/documents/172215/default/
[11] National Audit Office (2024). The effectiveness of government in tackling homelessness. 23rd July 2024.
[12] Garvie, D. et al. (2023). Still Living in Limbo: Why the Use of Temporary Accommodation Must End. Shelter.
[13] Local Government Association (2023). Post-Autumn Statement Temperature Check. November 2023.
[14] Ibid.
[15] Kent County Council (2022). Record of Decision: Kent Homeless Connect: Termination of Service. Decision no. 22/00075. Available at: https://letstalk.kent.gov.uk/kent-homeless-connect-consultation
[16] Booth, R. (2024). Planned cuts to shelters in England will cost lives, say homeless people. The Guardian. 24th May 2024.
[17] Levelling Up, Housing and Communities Committee (2022). Exempt Accommodation Report. 19th Oct 2022 HC 21.
[18] Blood, I. et al. (2019). ‘A Traumatised System’: Research into the commissioning of homelessness services in the last 10 years. Riverside, University of York and Imogen Blood & Associates.
[19] Mackie, P., Fitzpatrick, S. and Morris, N. (2024). Prevention into Action: Gaps and opportunities in locally-led homelessness prevention in England. Homeless Link.
[20] Homeless Link, Support for single homeless people in England, Annual Review 2022, 2023.
[21] Homeless Link (2024). Homeless Link submission to the Spring Statement 2024.
[22] Levelling Up, Housing and Communities Committee (2022). Exempt Accommodation Report. 19th Oct 2022 HC 21.
[23] Homeless Link (2021). Everyone In for Good: Homeless Link submission to the Comprehensive Spending Review 2021.
[24] Homeless Link (2024). Being Trauma-Informed – a practice development framework.
[25] Grassian, T. (2022). 2022 Workforce Survey: Key Findings. Homeless Link.
[26] Ibid.
[27] Blood, I. et al. (2019). ‘A Traumatised System’: Research into the commissioning of homelessness services in the last 10 years. Riverside, University of York and Imogen Blood & Associates.