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Private landlords pocket 87% of £1.2bn spent on homeless accommodation

·3-min read
The data does not take into account the increased spending during COVID-19. Photo: Getty
The data does not take into account the increased spending during COVID-19. Photo: Getty

Local authorities in England spent almost £1.2bn ($1.6bn) on temporary accommodation for homeless people in one year, new data shows.

Figures from the Ministry of Housing, Communities and Local Government (MHCLG) show that councils spent £1,186,130,000 between April 2019 and March 2020. This is an increase of 9% from last year and 55% in the last five years.

The data does not take into account the increased spending during COVID-19 when the government’s ‘Everyone In’ scheme saw thousands of people rapidly taken into safe accommodation.

Meanwhile, private landlords, letting agents and companies pocketed 87% of the total, the charity Shelter said.

The amount of money being paid to private accommodation providers rose by 66% in the last five years from £621m in 2014 and 2015 to more than £1bn in 2019 and 2020.

About 38% or £393m of the money paid to private accommodation providers was spent on emergency bed and breakfast (B&Bs) accomodations.

Often families sleep in one room and share kitchens and bathrooms, there is also a six-week limit on how long they can stay before being moved to more suitable accommodation.

Spending on emergency B&B’s has risen 73% in five years, Shelter said.

Britain’s housing crisis has been exacerbated by the coronavirus crisis, with UK prime minister Boris Johnson also promising “the biggest increase in home-ownership in decades,” to solve the issue. Johnson vowed that new low-deposit mortgages will help two million more people buy their own homes.

Watch: Why are house prices rising during a recession?

READ MORE: UK economy loses steam as new coronavirus curbs hobble recovery

Chief executive of Shelter Polly Neate, said: “It is outrageous that almost £1.2bn a year is spent on often shoddy and expensive temporary accommodation because of the lack of social homes.

“It’s a false economy for taxpayers’ money to be used to pay private landlords for grotty emergency B&Bs, which can be so terrible to live in that families end up deeply traumatised.

“The decades of failure to build social homes means too many people on lower incomes are stuck in unstable private rentals – increasing their chances of becoming homeless. This cycle of destitution persists when those who lose their homes turn to the council for help, because councils have so little social housing left, they can’t alleviate their homelessness for good. All they can do is pay over the odds for insecure temporary accommodation.

“If the government fails to act on this crisis, the economic chaos of the pandemic is only going to make what is already an awful situation worse, as even more people are forced into homelessness. The government must commit now to spending ‘smarter’ with a rescue package for social homes. By investing £12bn over the next two years, we could build an extra 144,000 lower-cost homes, including 50,000 desperately needed social homes.”

Earlier this month, the government unveiled a £10m Cold Weather Payment scheme for councils to help to keep rough sleepers safe this winter. The funds give local areas the tools and funding they need to protect rough sleepers from the cold weather and the risks posed by COVID-19.

Watch: What is Universal Basic Income?

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