Spending by councils in England on temporary accommodation for homelessness has risen by almost a third in a year, with one charity branding sums being charged by private providers “eye-watering”.
Net spending – which is the difference between the total outgoings for local authorities and their income – for the year to March was £1.44 billion.
This was an increase of 30.5% on the previous year, when expenditure, adjusted for inflation, stood at £1.10 billion.
Net spending on nightly paid, privately managed accommodation saw the “most significant increase”, the Ministry of Housing, Communities & Local Government (MHCLG) said, standing at £620 million in the year to March, up from an inflation-adjusted £323 million in the previous 12 months – a 92% jump.
Spending on hostels, which can include refuges, was just over £36 million, up around a fifth (21%) from £30 million the previous year, while bed and breakfast accommodation cost nearly £400 million, down very slightly (by 1%) from £405 million.
The figure for private sector accommodation, leased by a local authority or registered provider, rose by 18% from £177 million to £210 million, according to data published on Thursday.
Mairi MacRae, director of campaigns and policy at Shelter, said: “While the housing emergency is draining billions in public funds, families across the country are paying the ultimate price.
“Money that should be helping them into a secure home is instead shelled out on grim temporary accommodation, just to keep people off the streets.
“There’s nowhere near enough social homes and as a result homelessness has reached record levels, with thousands of desperate families showing up to their council’s doorstep for help.
“Private providers are cashing in on this crisis, charging eye-watering sums for rooms where children are forced to eat, sleep and do their homework on beds shared with siblings.”
She called on the Government to set out a “clear overall target for the delivery of social rent homes”.
Tom Hunt, from the Local Government Association which represents councils, said the figures show how “local authorities are having to stretch budgets further”.
He called for changes to the way councils are reimbursed by Government for temporary accommodation costs, saying current housing benefit reimbursement rules for temporary accommodation is “outdated”.
He said: “Councils must pay landlords according to current market rates whilst reimbursement for councils is linked to 2011 rental rates.
“This needs to change and government needs to act, specifically by making the rate the current rate, as opposed to one that’s 15 years old, as well as restoring the Local Housing Allowance (LHA) rates to at least the 30th percentile of local rents beyond 2025-26.”
John Glenton, at Riverside, which provides accommodation for people affected by homelessness, said the figures show the “immense and unsustainable” cost councils are facing, but do not reveal the human impact.
He said: “However, this spending does not show the immense toll that living in temporary accommodation has on families who are often forced to share beds, and live in one single room without kitchen facilities, leaving families deprived of sleep and the ability to make a warm, healthy meal.”
He called for a “significant and sustained increase in new social housing and dedicated ring-fenced funding spent on homelessness services and supported housing”.
Catherine Parsons, managing director of the Big Issue, said: “Local authority budgets are buckling under the weight of our over-reliance on temporary accommodation.
“These stark figures make it clear we cannot continue to rely on this sticking plaster solution when it comes to the homelessness crisis.”
Total gross expenditure by councils in England on temporary accommodation for homelessness was £2.84 billion in 2024/25, while revenue from sales, fees and other income stood at £1.40 billion, giving a figure for net overall spending of £1.44 billion.
A spokesperson for the MHCLG said: “These figures are not good enough.
“We will build 1.5 million homes so that everyone has a secure and affordable place to live.
“And as a first step to get on track to ending homelessness once and for all we’re spending £1 billion on vital services.”
