Labour Press | “Osborne must use the Budget to turn round spiralling homelessness figures”

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13 March 2016

Labour warn Osborne must use the Budget to turn round spiralling homelessness figures

Ahead of the Budget on Wednesday Labour has released new figures showing that on current trends the number of homeless families is set to reach almost 400,000 by 2020.

Headline ‘statutory homelessness’ statistics only capture those people who fall into a small number of so-called ‘priority need’ groups containing the most vulnerable applicants like pregnant women and young people leaving care. Along with charities and academics, Labour has argued that a much better measure also includes ‘prevention and relief’ cases where councils step in to stop families becoming homeless.

This more comprehensive measure reveals that homelessness rose to 275,000 families last year, up 75,000 from 2010, and is set to hit 369,000 by 2020 on current trends.

This is in addition to rough sleeping figures which records people sleeping on the streets and has doubled in the last five years.

This rise can be traced directly to decisions taken by George Osborne in previous Budgets which have led to big cuts in housing support over the last five years, including:

·         cuts to housing benefit support worth over £5bn since 2010 – 13 separate cuts to housing benefit over the last five years, including the bedroom tax and breaking the link between private rented sector housing benefit and private rents;

·         cuts to ‘supporting people’ funding for homelessness services – the National Audit Office have revealed that vital funding for homelessness services fell by 45 per cent between 2010 and 2015;

·         soaring private rents – averaging over £1600 extra each year than in 2010; and

·         the loss of affordable homes – with over 100,000 fewer council homes than in 2010.

Without a change of direction from George Osborne, cuts in this Parliament are set to hit housing services and support on an even bigger scale:

·         the further impact of cuts to housing benefit is set to total almost £11bn between 2015 and 2020, plus a new cap on housing benefit announced in the Autumn Statement which homelessness organisations say will lead to the mass closure of their services;

·         further cuts to local authority support meaning homelessness services unable to cope – the IFS calculate further real terms cuts of around 7 per cent to council budgets over the next five years;

·         private rent rises are set to continue with Savills predict an inflation-busting 16.5 per cent increase in average rents over the next five years; and

·         A further loss of 300,000 social rented homes predicted over the next five years.

Commenting, Labour’s Shadow Secretary of State for Housing and Planning John Healey MP said:

“Rising homeless figures carry the starkest warning for the Chancellor ahead of the Budget.

“This spiralling scale of homelessness shames us all when Britain is one of the richest countries in the world. It is a test of our basic humanity. It should shake the Chancellor from his complacency about the growing homeless crisis and shock him into action.

“The homeless figures hide personal stories of hurt and hopelessness; thousands of people whose ordinary lives have fallen apart from illness, debt, family break-up, addiction or redundancy.

“His failure to control housing costs and crude cuts to housing support over the last five years are making the problem much worse. The Government have no long-term housing plan for the country.

“George Osborne must use the Budget this week to stop the upward spiral of homelessness which is being driven by the government’s own housing policy failures.

“He must now re-think the multi-billion pound cuts to housing and homelessness support which are set to bite during this Parliament, as well as strengthening the law to help prevent homelessness happening in the first place as Labour has done in Wales.”



·         The wider measure of homelessness used here – including homelessness ‘prevention and relief’ cases as well as ‘statutory homeless’ acceptances – was developed and is used by leading housing academics in the annual ‘Homelessness Monitor’ commissioned by Crisis and the Joseph Rowntree Foundation :

·         Between 2009/10 and 2014/15 the average annual increase in this wider measure of homelessness was 6%. If the rate of increase in the last five years continued over the next five years this would mean 369,124 homelessness cases by 2019/20.

Source: DCLG statutory homelessness and homelessness prevention and relief statistics: 2009/10 – 2014/15.

·         In addition, the latest rough sleeping figures collected in Autumn 2015 show that the number of people sleeping on England’s streets has doubled since 2010 with 3,659 people recorded sleeping rough on one night:

·         Figures on housing benefit cuts for the last Parliament, and planned over the next were supplied by the House of Commons Library.

·         The National Audit Office have revealed that cuts to supporting people funding for homelessness services averaged 455.3% between 2010/11 and 2014/15:

·         Average private market rents were £1,608 a year more expensive in January 2016 than at the same point in 2010, according the LSL rental index:

·         There were 117,000 fewer council homes in England in 2014 than in 2010:

·         IFS figures suggest cuts to local authority budgets of around 7% over the next five years:

·         Savills have predicted UK-wide increase in rents of 16.5% over the next five years:

·         The Chartered Institute of Housing have said that as many as 300,000 homes for social rent could be lost over the next five years:

·         More information on the measure the Welsh Government have taken on homelessness are available here:


LGIU | The Homelessness Monitor England 2015

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The Homelessness Monitor England 2015

Sheila Camp LGiU associate | 21 May 2015


The Homelessness Monitor is a five year study funded by Crisis and the Joseph Rowntree Foundation; it was commissioned to provide an independent analysis of the homelessness implications of recent economic and policy developments in England, focussing on the effects of the recession and subsequent housing market downturn, together with recent social policy changes.

The Year 4 report monitors the impact on homelessness of the economic downturn and the effects of welfare and housing reform, analysing key trends since 2011. It identifies key emerging trends, such as the implications of the benefits cap and the increasing use by local councils of informal methods of assisting homeless households, meaning many homeless households do not show up on the statutory returns.

This briefing will be of particular interest to members and officers with responsibility for housing, welfare benefits and finance and of general interest to other elected members who are concerned about homelessness and the local authority’s ability to alleviate it.

Briefing in full


The Homelessness Monitor is a five year study providing an independent analysis of the impact on homelessness of recent economic and policy developments in England and the rest of the UK. The current report is the fourth annual report for England and indicates how homelessness stands in 2015, or as close to 2015 as data allows. In addition to examining the consequences of the post-2007 economic and housing market recession and subsequent recovery, it looks at the impact of the government’s social policy changes currently being implemented. Published in February 2015, it was not in a position to speculate on the implications of the recent general election result for households dependent on welfare benefits.

The researchers have adopted a wide definition of homelessness to include rough sleepers; single homeless people in hostels and shelters; statutory homeless households; and hidden homeless households such as people severely overcrowded, “sofa surfers” and squatters.

To inform the report, the researchers have reviewed relevant literature; carried out (annual) interviews with key informants from the statutory and voluntary sectors; undertaken statistical analysis of social, economic and homelessness trends; and, new for this year, undertaken an online survey of all English local authorities.

Theoretical, historical and international perspectives indicate there is no single trigger which leads to homelessness; rather, it is a combination of individual vulnerabilities combined with structural factors, such as labour market change. However, the key informants have consistently argued that policy changes – particularly housing and welfare reform – have a greater impact than the overall economic context.

Economic factors that may impact on homelessness in England

The overall context

The post-2007 recession produced the longest economic downturn in the past 10 years; GDP has now recovered to pre-recession levels but, when population growth is taken into account, GDP per capita remains below 2007 levels. Although unemployment continues to fall, earnings in real terms remain below 2008 levels.

Although the housing market has started to recover from its post-recession slump, UK house prices outside London remained well below 2007 levels in mid 2014. This is despite the record low interest rates since 2007 and the (limited) government assistance for first time buyers. Thus, the housing bubble which some feared has not materialised outside the capital. And lending institutions continue to exercise extreme caution in mortgage advances, which obviously affects new entrants to home ownership.

Of more fundamental concern is the shortfall in new housing supply in both the social and private sectors relative to real or potential levels of household formation; this increases the numbers of overcrowded or “sharing” households, particularly in London, where overcrowding is more severe.

One major growth area is the private rented sector (PRS), which is now larger than its social sector counterpart. Very little of the increase is attributable to new stock, the majority being previously owner occupied homes; Buy to Let mortgages typically only require the mortgagee to cover interest payments, whilst owner occupier mortgages require capital repayment too. The growing PRS numbers mean welfare reforms affecting tenants take on extra significance; this is considered in a later section.

Homelessness implications of the economic and housing market context

In contrast to the last major recession of 1990, which reduced statutory homelessness through easier access to owner occupation, thus freeing up social and private lettings, no such benign influence has been detected post-2007. In fact, social lettings to new tenants are well below levels in the 1990s.

On the positive side, evictions for mortgage and rent arrears so far remain a very small proportion (2%) of reasons for statutory homelessness. This may change when and if interest rates rise and mortgage lenders adopt a more aggressive stance on arrears, particularly in places where the sales market is recovering.

Research evidence suggested that, even if possessions for mortgage arrears do increase, the effect on homeless numbers will be marginal as most households from this sector find their own solutions, usually in the PRS.

In the rented sector, rent arrears and evictions fell during the recent recession, so implications for homelessness do not appear to be tied to the overall economic context; of far greater concern is the long term implications of welfare reform discussed below.

Coalition government policies potentially impacting on homelessness in England

Housing, homelessness and “localism”

The report authors have argued in previous Monitors that the Localism Act 2011 has undermined the national context of housing support for disadvantaged households by enabling local authorities to move to fixed term “flexible” tenancies and to introduce restrictions on joining the housing waiting list. Those restrictions identified included not fulfilling minimum residence qualifications (ranging from 2 to 5 years), a history of anti social behaviour, rent or council tax arrears, and a failure to engage in “work related” activities. Though the Localism Act retained the requirement to give “reasonable preference” to certain priority groups including statutory homeless households, it took a recent Court of Appeal ruling to establish that they could not be excluded through lack of residency.

In the housing association sector, landlords are increasingly urged to charge “affordable” rents of up to 80% of market rents, which are not in fact affordable to many low income households in high rent areas. It has also brought associations into conflict with some local councils who seek to set rent limits below the 80% maximum for associations operating in their areas. These social landlords make the counter argument that, to compensate for grant reductions, they are forced to put up rents if they are to continue developing new homes. Allied to this, the researchers were told, is associations’ tightening of nomination criteria – some are reluctant to take anyone with previous debt and some will only take working tenants.

In short, the Localism Act has served to reduce access to social housing for many low income households, who may or may not be homeless. For statutory homeless households, it gave local councils the power to discharge their rehousing duties with a single offer of a fixed term tenancy in the PRS and over half of those councils surveyed had already adopted this power (88% in London). This has had the effect of homeless applicants choosing to take the informal “housing options” route to resolve their potential homelessness, rather than risk the “one PRS offer” under the statutory procedure. Once they know they are very unlikely to get a social housing tenancy, the “housing options” route enables them to have more choice in the PRS.

The authors postulate that these changes, taken together will effectively mean that the PRS is taking over from the social rented sector as the tenancy of last resort. However, the overall impact of the changes must be considered alongside changes to welfare policies.

Welfare reform

The major elements of welfare reform – Local Housing Allowance changes, the benefit cap, and the spare room subsidy (“Bedroom Tax” ) – have, according to a recent LSE study, impacted disproportionately on lower income households, with those in the lowest three income deciles the biggest losers. This has a knock-on effect on how such households fare in the housing market, as indicated below..

Local Housing Allowance for the PRS is now set with reference to the 30th percentile of market rent rates (rather than the median) and is also capped and inflated by the lower of CPI or changes in market rents. This has effectively restricted access to the PRS for low income households, particularly in London, and forced London councils to look outside their local areas for suitable rented property for potentially homeless households. An additional problem is the extension to single under-35s of the Shared Accommodation Rate, which further restricts access to the PRS and causes problems in areas with no market for shared accommodation.

The Benefit Cap, set at £350 per week for single people and £500 for other households (with exemptions for people of pensionable age or with some disabilities) has impacted most severely on larger households in high rent areas. Although local authorities confirmed the numbers affected were relatively small, the impact on those households was considerable, with losses of over £100 per week in one third of cases.

The spare room subsidy introduced limits on eligible rent for social sector tenants deemed to have one or more “spare rooms”. The number of bedrooms the household are deemed to require is fixed by size criteria essentially derived from the social survey ‘bedroom standard’ measure established in the 1960s. Whilst it only applies to a small proportion of working age tenants in receipt of housing benefit, almost two thirds were either disabled or had a disabled partner. Most of those affected did not think they were “over-accommodated” and there have been numerous court challenges on, for example, the need for a separate bedroom for medical reasons or the small size of a room deemed to be able to be shared by two children (regardless of age). In many areas, particularly in the north, there is a dearth of smaller homes in the social sector, so the opportunity to downsize is very limited.

Affected tenants are being supported by Discretionary Housing Payments (DHP), private borrowing or cutting down on other essentials. About one fifth are not making any payment to cover the gap. The DHP budget is time-limited but at present, the researchers found that three fifths of it in England was being used to support bedroom tax shortfall.

Other welfare reform policies

There are a number of other welfare reform policies which either have not been fully implemented or have an indirect impact on homelessness.

  • Universal credit combines a number of welfare benefits, including housing benefit, into a single monthly payment and is currently being piloted for certain new claimants in a few pathfinder areas. Its full implementation has been deferred, largely due to computer problems. There is concern over how vulnerable claimants will cope with a single monthly payment and a more general worry among social landlords that the inclusion of housing benefit will increase both rent collection costs and rent arrears.
  • Council Tax Benefit: Government support for council tax benefit was cut by 10% from 2013-4, leaving local councils to make up the difference (or not). Although reductions to council tax benefit are relatively modest in cash terms, they are significant for those affected who were already struggling financially.
  • Sanctions: The imposition of sanctions on claimants of Job Seekers Allowance (JSA) and Employment and Support Allowance (ESA) has increased and has impacted disproportionately on people under 25, as shown by       recent JRF research. This has caused problems for both claimants and organisations dealing with homeless young people. On the positive side, they have formed good working relationships with the local Jobcentre plus to identify problems at an early stage.
  • Localised Welfare Assistance: The Social Fund, which provided emergency cash to claimants, was localised in 2013; this has resulted in fragmentation, with councils imposing conditions on eligibility for assistance, leading one service provider to comment “it’s been a nightmare in terms of people not being able to access cash”.

The cumulative effects of welfare reform on homelessness were already making some impact but the Monitor authors reported that only 10% of local authority respondents thought their impact had largely “run their course”. London respondents were more likely to forecast lessening impacts because the effects to date have been so dramatic, but generally the message is that the full impact is still to come. And that is without the £12b welfare cuts promised by the new government.

Homelessness trends in England

Statutory Homelessness

The Monitor found increases in all of the homelessness categories, except national figures for statutory homeless households, which fell by 2% in 2013-44. However, as discussed above, as more local authorities adopted the power to discharge their rehousing duty with one offer in the PRS, an increasing number of homeless households were opting for “informal” assistance, thus casting doubt on the statutory figures as offering an accurate picture.

Regional divergence is sharp, with London acceptances up by 80% since 2009-10, as opposed to a 14% fall in the north. Nationally, almost three quarters of the increase in acceptances was due to the loss of a PRS tenancy.

Rough Sleepers

Official figures show a continuing growth, up 37% since 2010, though showing only a 5% increase in the last two years. It is possible benefit restrictions on nationals from more recent EU members may increase rough sleeping among these groups.

Conclusions and future monitoring

In its conclusion, the report identifies seven key areas which have major implications for future monitoring of homelessness.

First, and perhaps most important, is the ongoing trend by local councils to steer homeless households away from the statutory homeless route towards more informal assistance, particularly where councils are discharging their rehousing duty via one offer in the PRS.

Second and linked to this trend is the validity of using statutory homeless acceptances as a measure of homelessness. Whilst the statutory returns may accurately record trends, they underestimate the true level of homelessness and indicate the need to capture numbers offered informal assistance by local councils.

Third, although local authorities outside London reported improvements to the service offered to single homeless people and other non-priority groups, this does not tally with the growth in rough sleeping, cuts to Supporting People cash and a more general reduction in homeless activities aimed at this group.

Fourth, this year’s findings pointed to London differences growing to the point where the capital was almost “another country” in homelessness terms. “The continuing shortfall in the levels of new house building relative to levels of household formation, in a context where there are already substantial numbers of concealed and sharing households, and severe levels of overcrowding in London, is a prime structural contributor to homelessness”.

Fifth, London local councils are increasingly unable to secure PRS accommodation in their area, both because of high rents and the disproportionate impact of welfare reform in London, but the consequences of this demographic change has not been fully grasped or documented.

Sixth, the extension of the Shared Accommodation Rate to under 35s, the extension of JSA/ESA sanctions and the localisation of the Social Fund plus other welfare reforms have had the cumulative effect of making many poorer households dependent on charity, such as food banks. At the same time, many are being pushed out of London and other high rent areas because of these changes.

Finally, the increasing movement towards “localising” key elements of housing and welfare support, such as the Social Fund and Council Tax Benefit, together with an increasing emphasis on “local connection”, is seriously undermining any national system of support for homeless households.


The Year 4 Housing Monitor report for England contains some fairly disturbing figures on the homelessness implications of the welfare reforms already implemented and a warning that these are expected to get worse – except in London, where their drastic effects have already been felt.

The report’s authors intend that the Year 5 report will be able to take a measured look at all the changes since 2010 – but by then, we may be trying to estimate the consequences of the further £12b of welfare cuts proposed by the new government. It will probably be too soon to reflect other housing policies, such increasing the numbers of new homes built and to increase access to home ownership for first time buyers.

Other sources
Rough Sleeping: House of Commons research paper (PDF document)