Urgent Call for Better Solutions as Temporary Accommodation Costs Spiral

Local Authorities are currently facing a challenging and ongoing budget crisis, with some spending over £500,000 each week on temporary accommodation. This situation is not only unsustainable but also deeply concerning, as it drains valuable resources and fails to provide the lasting solutions that communities desperately need.

The issue is prominently featured in the headlines: 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 staff and tenants and a sense of helplessness stemming from the chronic shortage of housing. Addressing the issue of housing shortages cannot be done overnight, putting councils in a difficult situation.

Housing Consultant and public and social housing policy and practice specialist Neil Morland commented “Bed and breakfast (B&B) accommodation is the most expensive form of temporary housing for local authorities, with significantly higher costs than local authority/housing association stock, which offers much better value. From April 2023 to March 2024, local authorities in England spent a record £2.2bn on temporary accommodation, doubling from five years prior, and incurred a £1bn deficit. On March 31, 2024, a record 117,450 households occupied temporary accommodation.

Despite accounting for nearly one-third of temporary accommodation expenditure (£700 million), B&Bs represented only 15% of usage. The income generated from households in B&Bs covered only 40% of their costs, forcing local authorities to absorb the remaining 60%!

Other types of temporary housing, such as night-paid accommodation and private-sector leases, also incurred deficits.

Local authority and housing association stock comprised only 4% of expenditure but accounted for 24% of usage, resulting in a 30% surplus. This was the only type of temporary accommodation that generated a positive net expenditure.

Reducing the number of households occupying temporary accommodation is the best way to reduce temporary accommodation deficit net expenditure. However, high numbers of households continuing to seek homelessness assistance from local authorities, bringing down the levels of temporary accommodation usage are unlikely to happen in the short-term”

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, which can lead 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—massive waiting lists, nowhere to house people, and no budget left to find alternatives,” said Deborah Matthews, Managing Director for MRI Living for Social Housing at MRI Software. “It’s at a crisis point, and it’s been that way for too long. Something needs to change now.”

As a leading supplier to the sector, MRI Software encourages councils to evaluate their processes and identify any inefficiencies that may 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,” added Deborah. “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 the 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.