Patrick Mooney, housing consultant and editor of Housing, Management & Maintenance, explores why recent hikes in spending on temporary accommodation for the homeless highlights the urgency to build more social housing.
The case for building tens of thousands of new social housing properties each year has surely been made by alarming figures showing huge increases in the numbers of homeless people placed in bed and breakfast hotels, at a frightening cost to the taxpayer.
Latest official figures show there are 10,510 households that have been placed in B&B hotels compared with just 2,310 around a decade ago – an increase of more than 450%.
At the same time, English councils have reported their spending on placing homeless households in B&Bs has risen by over 530%, from £26.7m in 2010/11 to a staggering £142m in 2019/20.
This cost is borne by all of us through a combination of council tax, borrowing and central Government grants, all of which are ultimately paid for by the taxpayer. And of course it is only buying us a sticking plaster – a short period in a B&B.
It is not buying us any new homes that could contribute towards a long-term solution, but it is lining the pockets of the ‘get rich quick’ B&B owners. To make matters worse, the accommodation provided is often unsuitable for stays of more than just a few days’ duration with limited space, a lack of many modern facilities, no access to gardens, and very little privacy.
Fewer social homes built
Households are often placed in hotels that are remote from their families and friends, so they also lack vital support at times of severe personal stress.
With a shortage of rented accommodation suitable for families to be moved into, the average stays in B&B hotels are also getting ever longer, and this is particularly damaging to the education and life chances of children. This adds indirectly to the B&B costs and will be with us for many years to come.
Of course this is all happening at the same time as levels of second home ownership and properties owned by overseas investors, are both at record high levels. And yet the number of new homes being built for letting at the more affordable social rents are at very low levels. This is despite overall housebuilding hitting new highs.
There were 49,470 completed homes in the first quarter of 2021, the highest figure in over 20 years and a 4% increase compared to the last three months of 2020. During the same period 46,010 new homes were started, which is the highest number in nearly 15 years and a 7% increase on the previous quarter.
But the vast majority of these new homes were for sale – either outright, or via one of a number of shared ownership models. Realistically very few of the homeless households which are housed in B&Bs will be in the market for these properties. Instead they need decent homes, let at rents they can afford and which provide them with secure housing.
New powers for delivering homes target
Last year the 50 biggest developing housing associations built 34,753 new homes at a cost of £6.1bn, but only 5,009 of the new homes – or 14.4% of the total – were for social rent (compared with 16.7% for market sale, 30.8% for shared ownership and 32.9% for affordable rent). More positively, some 7,667 new social rent homes were started last year, but there is clearly a lot of catching up to be done.
As a result of the above, the Local Government Association (which represents councils across England) has put together a six-point plan to help prevent and reduce homelessness. At the top of its list, the LGA wants councils to be given further powers and resources to build 100,000 social homes for rent each year, on top of those being built by HAs.
With previous LGA analysis showing council housing waiting lists could double as a result of the pandemic, giving councils these new powers would help the Government to meet a third of its annual housing target (of 300,000 new homes a year) and reduce homelessness.
By reforming the Right to Buy so that councils can retain 100% of sales receipts, having the flexibility to combine these receipts with other Government grants and being able to set the size of discounts locally, councils could go even further. The LGA says these measures would enable councils to significantly boost the number of new homes built, supported by the right infrastructure.
Polling by the LGA has also found that 80% of MPs and 88% of Peers think councils should have more financial freedoms and powers to build new homes. Other measures include making it easier for councils to use Compulsory Purchase Order powers to buy empty properties and protecting or even increasing welfare benefits to the most vulnerable.
Six point plan explained
Councillor David Renard, the LGA’s housing spokesperson, said: “Sadly, these figures reflect the scale of the housing challenges that our country faces. Councils will only use B&Bs as a last resort, but the severe lack of suitable housing means they now have no choice.
“This is hugely disruptive to families with children, and the rising demand for support has come with soaring costs for councils. Throughout the pandemic, Government has trusted councils to get on with the job of protecting the nation, supporting people and putting infrastructures in place to help with recovery. We want to continue this momentum and work with Government to tackle the shortage of housing and build the homes the country desperately needs.
“With the right funding and freedoms, councils can help Government to achieve its ambitions for our national recovery from the pandemic. Giving councils the powers to build council housing on the scale required, would go a significant way towards reducing homelessness and the need to place households in bed and breakfasts.”
During the coronavirus crisis, central and local government have shown what can be achieved when they work together towards a shared goal with councils demonstrating their ability to lead and deliver on the most pressing issues facing residents right across the nation.
With a national focus on improving building safety some four years on from the Grenfell Tower fire, it is clear there will be many calls on the public purse. Reducing the spend on B&Bs will help, although it is clear that this is one of those situations where as a nation we need to invest to save in the long run.