The National Audit Office (NAO) has issued a sharp critique of the previous Conservative government, highlighting its failure to establish a coherent strategy or public targets for tackling homelessness. The report also criticises the government for falling short on its commitments to increase housing supply.

Released at the end of last week, the report examines the final two years of Conservative leadership. It notes that while homelessness is a complex issue influenced by a range of social and economic factors, as well as government policies on housing, welfare, and asylum, the government’s efforts were inadequate.

The NAO points out that despite recognising the multifaceted nature of homelessness, the lack of a clear strategy and measurable targets contributed to the ongoing crisis. Additionally, the report underscores the government’s failure to deliver on promises related to expanding housing availability, exacerbating the situation further.

The report highlights a significant increase in statutory homelessness over recent years, resulting in a growing number of people either without stable housing or dependent on temporary accommodation provided by local authorities. 

In the financial year 2022-23, local authorities incurred costs exceeding £1.6 billion for temporary accommodation. However, the quality of these accommodations is often variable. Some types of temporary housing, such as the use of bed and breakfasts for families with children, are deemed unsuitable and fall short of acceptable standards. 

The National Audit Office warns that this rising demand for temporary accommodation and the associated costs are putting considerable financial pressure on local authorities. The situation is creating an unsustainable burden, further exacerbating the challenges faced by these councils in addressing homelessness effectively.

The report highlights two major issues related to the private rental sector:

It notes that the shortage of social rental housing forces many households into the private rental market, which is generally more expensive and offers less secure tenancies compared to social housing. The end of an assured shorthold tenancy in the private sector is a significant cause of homelessness, affecting about 23% of households in Quarter 3 of 2023-24. Additionally, the lack of social rental options restricts pathways out of homelessness for those in temporary accommodation, as local authorities often struggle to find affordable private rental properties within Local Housing Allowance (LHA) rates in their area.

Some stakeholders have observed an increase in homelessness due to landlords exiting the private rental sector. Reasons for this include rising mortgage costs, the lure of higher returns from short-term lets, and uncertainty over proposed housing legislation like the Renters Reform Bill and changes to eviction rights. Additionally, high net migration and increased household numbers since 2013 have driven up demand in the sector.

The NAO’s assessment of the previous government’s efforts finds that the situation has deteriorated since their 2017 report. Despite the introduction of the Homelessness Reduction Act, homelessness figures have reached record highs and are expected to rise further. Although the Department of Levelling Up, Housing and Communities (DLUHC) has improved data collection and collaboration with local authorities, the previous government lacked a clear strategy or public targets for reducing statutory homelessness and has fallen behind on crucial housing supply programmes.

Funding for homelessness prevention remains fragmented and generally short-term, which limits the effectiveness of initiatives aimed at preventing homelessness and investing in high-quality temporary accommodation and other housing solutions. This inconsistency in funding makes it difficult to sustain long-term efforts and build the necessary infrastructure to address homelessness effectively.

Until these funding issues and their impacts are addressed comprehensively across government departments, the Department of Levelling Up, Housing and Communities (DLUHC) will be unable to demonstrate that it is achieving optimal value for money in its efforts to tackle homelessness. The lack of stable and substantial funding undermines the department’s ability to implement and sustain meaningful solutions to the homelessness crisis.

You can read the full NAO report here.

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