Reduced funding risks undermining homelessness prevention

London boroughs have warned that reduced government funding risks undermining homelessness prevention work in the capital, amid growing cost-of-living pressures.

Although London’s figures for reducing rough sleeping have fallen for the third year in a row, the cross-party group London Councils is calling for a similar focus to be applied to wider forms of homelessness.

The government recently confirmed that funding provision to local authorities in England for Discretionary Housing Payments (DHPs) in 2022/23 would reduce by 28 per cent – from  £140 million to £100 million. London Councils highlights that London’s allocation has fallen from £37 million to £26.7 million.

Although the chancellor’s recent Spring Statement boosted the Household Support Fund for councils to help the most vulnerable residents meet their everyday living costs, there was no targeted measure on homelessness prevention.

Boroughs describe DHPs as a ‘vital’ homelessness prevention tool. The latest available figures show that in 2020 boroughs issued 32,338 DHPs to help hard-pressed Londoners meet their housing costs. Government data also reveals a growing need, with the number of universal credit claimants in London who do not receive enough support to cover their rent increasing by 180 per cent to 133,570 between August 2019 and 2021.

Muhammed Butt, London Councils’ Executive Member for Welfare, Empowerment & Inclusion, said: “We’re facing the most severe homelessness crisis in the country and boroughs are deeply concerned by the reduced funding available for discretionary housing payments. These payments are boroughs’ main homelessness prevention tool. They can be vital for helping low-income households pay their rent and keep a roof over their heads. With so many Londoners struggling to make ends meet, we’re worried what will happen if fewer discretionary housing payments are available.

“We know the government shares our ambitions on tackling homelessness. Good progress is being made on reducing rough sleeping – but we need the same focus and funding boost for preventing other forms of homelessness. A staggering number of Londoners already live in temporary accommodation and we can’t afford for these numbers to go up even further.”

London accounts for two-thirds of England’s homelessness total and boroughs spend almost £1 billion every year on homelessness services, the majority of which goes towards temporary accommodation costs.