Districts facing some of the most severe homelessness pressures in England are set to lose millions in prevention funding under Government proposals, analysis has suggested.
A new formula, currently under consultation, could see significant reductions in the homelessness prevention grant, particularly in coastal towns, rural communities, and university cities. Critics argue that the proposed changes fail to consider key local housing factors, such as social housing availability, private rental affordability, and household sizes.
London boroughs are expected to receive an average increase of 10%, while areas outside the capital, many of which have seen some of the sharpest rises in homelessness, are set to experience substantial cuts.
Severe cuts to key districts
Among the worst-affected areas is Hastings, where the demand for temporary accommodation has surged from 37 households in 2016 to 567 today. The local council’s spending on homelessness has ballooned from £730,000 to £6.5 million in just five years, yet Hastings Borough Council is facing a 34% cut to its homelessness prevention grant, losing £754,000.
Similarly, Oxford, where homelessness support cases have risen by 128% in three years, stands to lose £776,708 (36%) of its funding.
The District Councils’ Network (DCN), which represents 164 councils covering 20 million people, warns that these cuts come amid a 49.9% rise in households in temporary accommodation over the past three years. Additionally, the number of households with children needing emergency housing has increased by 70% in the same period.
Rising social housing demand
Social housing waiting lists have grown to 303,000 households, with some areas reporting an increase of over 50% since 2020. Data also shows a 21% rise in the number of households seeking council support to prevent homelessness since September 2021.
Hannah Dalton, DCN’s spokesperson on housing, described the funding cuts as “illogical” given the current crisis.
“Much of the recent increase in homelessness has been felt hardest outside of the biggest cities, including rural communities, coastal towns, and university cities. Many of these areas are also dealing with an influx of homeless people relocated from London boroughs, yet the Government’s funding plans will see them lose out,” she said.
She added that the grant is a lifeline for many struggling households, helping prevent homelessness through emergency rental support and deposit assistance.
“Without proper funding, councils will have to make impossible choices about which desperate households they can help,” she warned.
“Behind the data lies real human misery – children facing disrupted education, families living in squalid conditions, and workers losing jobs because they can no longer afford the commute.”
Homelessness at a record high
The concerns come as rough sleeping in England has risen by 20% in a year, according to new Government estimates.
A snapshot count conducted in autumn 2023 recorded 4,667 people sleeping rough on a single night, an increase of 769 people compared to the previous year.
The total number of rough sleepers has more than doubled since 2010, when the estimates first began, with just 1,768 people recorded at that time.
The proposed funding formula is expected to be most damaging to councils reliant on private temporary accommodation, where housing costs far exceed benefit rates. Some districts are now spending over a quarter of their council tax income on homelessness services. In Hastings, this figure reaches 58%.
Glenn Haffenden, deputy leader and lead councillor for housing at Hastings Borough Council, said:
“We are deeply disappointed with the proposed changes. Hastings stands to lose £750,000, which would have a devastating impact on our ability to provide homelessness prevention services.
“This cut would erase the extra funding we received last year and would force us to make difficult decisions, including reducing other vital council services.”
Government’s response
A spokesperson for the Ministry for Housing, Communities and Local Government defended the proposals, saying:
“This Government is taking urgent and decisive action to tackle homelessness and ensure funding is fairly distributed in line with demand.
“We are providing £1 billion in additional support for homelessness services and tackling its root causes by abolishing Section 21 ‘no-fault’ evictions and delivering 1.5 million new homes, including the largest increase in social and affordable housing in a generation.”
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However, London Councils, which represents the capital’s 32 boroughs, dismissed claims that London does not require additional funding.
“London is the epicentre of the homelessness crisis,” a spokesperson said.
“London families make up 56% of homeless households nationally, yet boroughs receive just 42% of the homelessness prevention grant.
“To suggest London does not need extra funding completely ignores the reality we are facing.”
Worst-hit councils
The district councils expected to be worst affected under the proposed funding formula include:
| Council | Grant Loss (£) | Percentage Cut (%) |
|---|---|---|
| Huntingdonshire | 519,790 | 39% |
| Exeter | 542,135 | 38% |
| Gloucester | 563,888 | 37% |
| Oxford | 776,708 | 36% |
| Broxbourne | 474,329 | 36% |
| Hastings | 754,114 | 34% |
| Arun | 546,289 | 33% |
| Mid Sussex | 298,365 | 31% |
| Welwyn Hatfield | 380,332 | 27% |
| Tendring | 377,619 | 26% |
As the consultation process continues, campaigners are calling on the Government to reconsider its funding allocation and prevent further hardship for struggling families.
With homelessness levels reaching record highs, local councils warn that drastic funding cuts will only worsen the crisis, leaving thousands more at risk of losing their homes.
