Desperate councils are being “ripped off” as private housing providers take advantage of the growing homeless population, experts have warned, after new figures revealed that local authorities’ spending on temporary accommodation had soared to almost £1bn.

Analysis by the Guardian and the housing charity Shelter found that councils across England spent £997m on temporary accommodation in 2017-18, a 71% increase on the £584m in 2012-13.

Some councils are spending as much as £200 per head of their population on sheltering homeless households.

Housing policy experts said that the sharp rise in homelessness coupled with increasing charges from private providers were behind the increase.

The number of homeless households in England in temporary accommodation has risen by 47% in the last five years, according to official figures. At the end of June this year, there were 82,310 families in temporary accommodation, up from 55,840 in June 2013.

In an illustration of the extent of the capital’s housing crisis, all 32 London boroughs appeared among the top 45 local authorities with the highest per capita spend on temporary accommodation.

About 55,000 London households are living in temporary accommodation, and almost 70% of England’s homeless families are based in the capital. Only about 6% of London’s private rental market is available to families relying on housing benefit.

Most London councils rely on small private landlords to provide their temporary accommodation. In many cases landlords can make more profit from accommodation at the bottom end of the market if it is rented to councils for homeless households.

Councillor Darren Rodwell, the London Councils executive member for housing and planning, said the cost of securing suitable accommodation for homeless households was growing and the situation was unsustainable.

“These figures show how local authorities and taxpayers are being ripped off by failings in the national approach to this issue,” he said. “The government needs to take action. It’s clear we can’t keep relying on increasingly expensive private-sector accommodation, so more must be done to boost provision of social housing.”

According to a list compiled using government figures, Hackney spent the most per head of its population (£208) on temporary accommodation, more than 10 times the national average of £18.

While Kensington and Chelsea did not record its spending on temporary accommodation with central government, a spokesperson said the council spent £34.35m in the last financial year, an equivalent of £218 per capita. That figure does not include spending on housing Grenfell families.

Among the non-London councils to reach the top 45 were Luton, which came in at number 17 (£77 per capita), Brighton and Hove at number 18 (£76) and Milton Keynes at number 30 (£38).

Manchester and Peterborough were the first areas outside the south-east to appear in the list, at 33 (£30) and 40 (£22) respectively. Birmingham came in 42nd place, spending £20 per head on temporary accommodation.

Fiona McLeod, 37, a former probation officer, has been living in temporary accommodation provided by Hackney council since May 2017. At first she lived in a hostel for about nine months with her 15-year-old son, before moving to a small flat over the border in Tower Hamlets in February this year.

The flat, which consists of a small kitchen-cum-living space and two bedrooms, costs Hackney council £310 a week. The room in the hostel, with two single beds and a small shower room, costs the council £256 a week.



The flat she is currently in is in a converted unit in an industrial estate. She can’t open her windows because it allows dust into the flat from the neighbouring concrete mixing plant. “It’s just stupid, the amount of money they are wasting,” said McLeod. “When I get into a council place, I’m looking at paying a maximum of £115 a week.”

Before moving into the hostel, McLeod and her son lived for a year and a half in her mother’s one-bedroom flat. Her mother, who was in her 70s, slept on the sofa and McLeod and her son shared a double bed.

“I used to love Hackney,” she said. “But the gentrification is disgusting. Hackney is now more or less a white borough and it never was before. It was so multicultural. Now all you’ve got is these really expensive trendy bars, loads of twentysomethings with endless disposable income.”

There are 3,000 households living in temporary accommodation in Hackney alone, with more than 13,000 households currently on the housing waiting list. One of the main causes of homelessness in the borough is the ending of tenancies because landlords want to sell properties or raise rents.

Councillor Rebecca Rennison, Hackney’s cabinet member for finance and housing needs, said the council wanted to provide families with modern, stable council homes but the borough was facing an unprecedented housing crisis. “Temporary accommodation such as hostels or B&Bs is often the only way of ensuring those in housing need can remain in Hackney while they await a more suitable place to call home,” she said.

Greg Beales, the campaign director of Shelter, said: “Long queues of homeless families pleading with councils for help and a billion pounds spent on temporary accommodation are just some of the unwanted consequences of welfare cuts, rising rents and a failure to build social homes.

“And this bill is getting even higher as landlords charge desperate councils over the odds for some of the least suitable and worst places for homeless families to live, like emergency B&Bs.

“Not only are these incredibly expensive, families are often forced to share bathrooms and kitchens with strangers, sleep in one cramped room or even share a bed, and children are left with nowhere to play.” Shelter is preparing to publish its major post-Grenfell report into the future of social housing in England in January.

The minister for housing and homelessness, Heather Wheeler, said: “Having somewhere to stay and a place to call home is vital in helping those who are homeless rebuild their lives, and we are determined to make this a reality.

“Temporary accommodation acts as an important safety net – ensuring that the most vulnerable have a roof over their heads until longer-term housing can be found. We’re providing more than £1.2bn to tackle all forms of homelessness, including funding for programmes such as the Private Rented Sector Access Fund, which will support more homeless families into long-term private rented accommodation.”

The Guardian and Shelter looked at the rise in expenditure on temporary accommodation between 2012-2013 and 2017-2018. The analysis used ONS population estimates to work out per capita spending for each local authority, in order to account for differences in population size.

Additional reporting by Katherine Purvis