Fixing funding for homelessness services

Tuesday, 23 April 2019 - 2:37pm

Beatrice Orchard from St Mungo's explores the impact of changes in local authority spending on homelessness services over the past decade, and how funding for these services can be put on a sustainable footing.

Everyone needs a safe, secure, and affordable home. Some people also need support to find and keep a home, and cope with problems that might put them at greater risk of homelessness such as poor mental health, substance use and domestic abuse. Homelessness services provide this support and ultimately work with people to find a route to end their homelessness for good.

Funding for homelessness services typically comes from local authorities. And for some time local authorities and service providers have been raising concerns about the impact of government cuts to council funding on levels of homelessness and rough sleeping.

Although the last official street count figures showed a 2% fall in the number of people sleeping rough, the number is 165% higher than it was in 2010 and the systemic causes of homelessness are far from being resolved.

In the run up to the Spending Review, Homeless Link and St Mungo’s wanted to understand more about changes in local authority spending on services to prevent and reduce homelessness over the past decade, the impact of these changes and how funding for homelessness services can be put on a sustainable footing. We commissioned WPI Economics to help with some new research and analysis.

Key findings

On the one hand the research confirms what we already knew – that there has been a significant reduction in spending on homelessness services. On the other, it shines a light on where cuts have fallen for the first time.

While spending on homeless families has risen as a result of the legal duty councils have to house the growing number of homeless households with children, spending on ‘single homeless households’ has fallen dramatically.

Some homeless individuals and couples without dependent children might meet the ‘priority need’ criteria for housing under homelessness legislation, but most rely on homelessness services that councils are not legally obliged to provide, such as supported housing and floating support.

The research finds that almost £1bn less was spent on single homelessness in 2017/18 compared to 2008/9, a fall of over 50 per cent. 

The impact has been a reduction in the number of services, despite the growing demand, as well as forcing councils and service providers to focus their work supporting people in crisis, rather than on “upstream” prevention services to stop homelessness happening in the first place.

There is also less certainty and a serious risk to the sustainability of services. Without sufficient funding, councils are relying more on short-term pots of money that they have to bid for from central government. This is far from ideal for the people who risk losing the services and relationships they rely on.

Recent funding provided as part of the Government’s rough sleeping strategy is valuable, but it falls far short of the £590 per year that has been lost on average according to our new research.

A better funding solution

We are calling for three key principles to apply to funding for homelessness services in the future: sufficient funding to meet existing need and prevent homelessness in the first place; certainty for local authorities that funding will be provided as part of their overall financial settlement rather than via small bidding rounds; and sustainability in order to drive a long-term reduction in homelessness.

This means the Government must use the Spending Review to invest an extra £1 billion a year in homelessness services through a ring-fenced grant to local authorities.

Government has to recognise that to achieve its stated aims of preventing homelessness and ending rough sleeping, something has to change.  Long-term guaranteed funding for homelessness services is a key part of the solution if we are to create a society free from homelessness where everyone has a home for good.


Read the full report from WPI Economics here

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Beatrice Orchard

Head of Policy, Campaigns and Research

Beatrice Orchard is the Head of Policy, Campaigns and Research at St Mungo's.