Growing numbers of homeless families and the increasing cost of putting them up in bed and breakfast hotels caused two-thirds of English local authorities to break their homelessness budgets last year, say councils.

Analysis by the Local Government Association (LGA) found that councils collectively spent £663m on homelessness services in 2018-19 – a 28% overspend amounting to a £140m excess budget.

It warned that local homelessness services were being pushed to “breaking point” by rising demand caused by a shortage of social housing and the gap between rents and housing benefit, which made housing unaffordable for low-income families.

Cllr David Renard, the LGA’s housing spokesman, said homelessness was one of the most pressing issues facing councils. “To reverse rising levels of homelessness, which represents huge human consequences and financial costs, the government needs to invest in homelessness prevention.”

Cllr Kieron Williams, cabinet member for housing management and modernisation at Southwark council which overspent by £4m in 2018-19 said councils would continue to struggle without government action to fix the broken housing market and reforms to the benefits system to ensure it covers the cost of renting locally.

Quick guide Rough sleeping and homelessness in the UK Show Hide Is rough sleeping getting worse? The government claims rough sleeping in England fell for the first time in eight years in 2018, from 4,751 in 2017 to 4,677. But the body that oversees the quality of official statistics in the UK has said the number should not be trusted after 10% of councils changed their counting methods. Rough sleeping in London has hit a record high, with an 18% rise in 2018-19. The numbers of people sleeping rough across Scotland have also risen, with 2,682 people reported as having slept rough on at least one occasion. Shelter, whose figures include rough sleepers and people in temporary accommodation, estimate that overall around 320,000 people are homeless in Britain. What’s being done about rough sleeping? The government’s Homelessness Reduction Act 2017, which places new duties on state institutions to intervene earlier to prevent homelessness has been in force for more than a year, but two thirds of councils have warned they cannot afford to comply with it. In 2018, James Brokenshire, the housing secretary, announced a one-off £30m funding pot for immediate support for councils to tackle rough sleeping. How does the law treat rough sleepers? Rough sleeping and begging are illegal in ENgland and Wales under the Vagrancy Act 1824, which makes ‘wandering abroad and lodging in any barn or outhouse, or in any deserted or unoccupied building, or in the open air, or under a tent, or in any cart or wagon, and not giving a good account of himself or herself’ liable to a £1,000 fine. Leading homelessness charities, police and politicians have called on the government to scrap the law. Since 2014, councils have increasingly used public space protection orders to issue £100 fines. The number of homeless camps forcibly removed by councils across the UK has more than trebled in five years, figures show, prompting campaigners to warn that the rough sleeping crisis is out of control and has become an entrenched part of life in the country. Is austerity a factor in homelessness? A Labour party analysis has claimed that local government funding cuts are disproportionately hitting areas that have the highest numbers of deaths among homeless people. Nine of the 10 councils with the highest numbers of homeless deaths in England and Wales between 2013 and 2017 have had cuts of more than three times the national average of £254 for every household. What are the health impacts of rough sleeping? A study of more than 900 homeless patients at a specialist healthcare centre in the West Midlands found that they were 60 times more likely to visit A&E in a year than the general population in England. Homeless people were more likely to have a range of medical conditions than the general population. While only 0.9% of the general population are on the register for severe mental health problems, the proportion was more than seven times higher for homeless people, at 6.5%.

Just over 13% of homeless men have a substance dependence, compared with 4.3% of men in the general population. For women the figures were 16.5% and 1.9% respectively. In addition, more than a fifth of homeless people have an alcohol dependence, compared with 1.4% of the general population. Hepatitis C was also more prevalent among homeless people.

Sarah Marsh, Rajeev Syal and Patrick Greenfield

He added: “Last year we received 3,054 homelessness applications, up from 2,685. History tells us to expect that kind of surge in a recession but it’s over a decade since the last crash and nationally the numbers are still going up.”

The LGA said councils needed desperately to be allowed to build more social housing and called on the government to boost local housing allowance (LHA) benefit rates to protect families at risk of becoming homeless.

Housing charity Shelter estimates that around 370,000 low income households renting privately in England struggle to bridge an average £113 a month gap between their rent and their LHA benefit payments.

Official government figures highlighted by Shelter show that there was a net loss of 17,000 social homes in England in 2019. Some 23,740 were sold under right to buy or demolished, while just 6,287 new homes for social rent came on stream.

The LGA analysis found that English councils had collectively increased and overspent their homelessness budgets in each of the last four years. Budgets had risen from £306m in 2015-16 to £503m in 2018-19, while the percentage annual overspend had climbed from 16% to 28% over the same period.

A chunk of the overspending has gone on putting homeless families up in bed and breakfast accommodation, up a fifth to £115m in 2018-19. There are currently 7,110 homeless households in B&Bs – a 15-year high, according to the LGA.

The growing cost of housing homeless families has alarmed local authorities, which spent nearly £1bn in England alone on temporary accommodation in 2018-19, up 71% from the £584m spent in 2012-13. More than 86,000 households are currently in temporary accommodation, including 127,000 children.

Ministers have announced a £112m rough sleeping grant to fund up to 6,000 bed spaces and 2,500 support staff across England and pledged to end rough sleeping by 2024. “No-one should have to face a night on the street and we have a moral duty to support those who need help the most,” said housing secretary Robert Jenrick.

A surge in rough sleeping saw 4,677 people bedding down on the streets or in sheds and tents in 2018, according to latest official government figures. This is 165% higher than in 2010, and charities say the figures are conservative. However, rough sleeping accounts for just a tiny fraction of overall homelessness figures.

Jon Sparkes, chief executive of homelessness charity Crisis, said: “It is very encouraging that the government has launched its Rough Sleeping Initiative and is investing in funding to tackle this urgent issue.

“However, we need to make sure we find long-term solutions rather than just keeping people homeless in night shelters. Low incomes and high rents are forcing people into homelessness in the first place and this is what we need to address urgently.”