Local authorities are currently facing an ongoing budget crisis, with some spending over £500,000 each week on temporary accommodation. This situation is not only unsustainable but also deeply concerning because it drains valuable resources and fails to provide the lasting solutions that communities desperately need.
The problem is prominently featured in the headlines, with daily reports of families living in substandard conditions and local councils struggling to manage the demand. The consequences include damaged reputations, growing frustration among both council staff and tenants and a sense of helplessness stemming from the chronic shortage of housing. However, addressing the problem of housing shortages can’t be done overnight, putting councils in a difficult situation.
Deficits and funding gaps
Social housing policy consultant Neil Morland said, “Bed and breakfast accommodation is the most expensive form of temporary housing for local authorities, with significantly higher costs than local authority or social housing stock. From April 2023 to March 2024, local authorities in England spent a record £2.2 billion on temporary accommodation, doubling from five years ago, and incurred a £1 billion deficit. Furthermore, at the end of March 2024, a record 117,450 households were in temporary accommodation.
“Despite accounting for nearly one-third of temporary accommodation expenditure (£700 million), B&Bs represented only 15 per cent of usage. The income generated from households in B&Bs covered only 40 per cent of their costs, forcing local authorities to absorb the remaining 60 per cent.
“Local authority and social housing stock comprised only four per cent of expenditure but accounted for 24 per cent of usage, resulting in a 30 per cent surplus. This was the only type of temporary accommodation that generated a net-positive expenditure.
“Reducing the number of households occupying temporary accommodation is the best way to reduce temporary accommodation deficit net expenditure. However, with high numbers of households continuing to seek homelessness help from local authorities, bringing down the levels of temporary accommodation usage are unlikely to happen in the short-term.”
Put away the spreadsheets
From a technology provider’s perspective, we believe there are opportunities for improvement. Many councils face challenges managing substantial expenses and intricate cases using traditional spreadsheets, leading to errors and overlooked priorities. We see this as an area where enhanced technology solutions could make the process more efficient and support councils in navigating their responsibilities more effectively.
We understand the pressure local authorities are under, with massive waiting lists, nowhere to house people and no budgets remaining to fund alternatives. It’s at a crisis point and it’s been that way for too long so something needs to change now.
Affordable solutions
As a leading supplier to the sector, MRI Software encourages councils to evaluate their processes and identify any inefficiencies that might be exacerbating the current crisis. Investing in smart, purpose-built and, most importantly, affordable software solutions can be transformative. These tools can help councils manage temporary accommodation more effectively, track cases and ensure that the most vulnerable individuals receive the assistance they need before their situations deteriorate.
We know it’s a tough job but we believe there’s a way to make it easier. There are technology solutions designed specifically to manage temporary accommodation, helping staff manage caseloads, track and prioritise needs and keep people from falling through the cracks.
As the government greenlights 5,000 brownfield developments, local authorities must act quickly and make their internal processes more efficient. Investing in the right technology could make a big difference, helping councils stretch their budgets further and provide better outcomes for those in need.
Deborah Matthews is the managing director for social housing at MRI Software.
