Image: Istock
Temporary accommodation: in search of solutions
As local authority expenditure on temporary accommodation continues to rise, the Temporary Accommodation Network is sharing ideas and expertise to find sustainable solutions to the crisis
GROWTH, REGENERATION & DEVELOPMENT
James McHugh
Senior Consultant, Campbell Tickell
James McHugh
Senior Consultant, Campbell Tickell
Issue 81 | December 2025
The Temporary Accommodation (TA) crisis shows little sign of abating, with the number of children living in TA continuing to reach new heights and cash-strapped local authorities’ spending on TA increasing by a quarter in just a single year. This is a crisis with profound costs, both human and financial, which are clearly unsustainable and undesirable.
In recognition of this, we have been partnering with Devonshires on a Temporary Accommodation Network (TAN) to find more sustainable solutions to the crisis.
Through TAN we have sought to share best practices and generate discussion via the publication of case studies and a programme of free-to-attend events.
Our membership is open and diverse, ranging from local authorities and registered providers to funders and private landlords – demonstrating the breadth of concern about this issue across our sector.
Former office block Zodiac House in Croydon has been transformed into 73 homes for households in need of emergency accommodation, reducing the council's reliance on private rented sector.
Sharing insights
At our most recent TAN event on 30 September, we convened a panel of speakers to share their ideas, experiences and insights into the financial implications of TA. This included:
- Common Projects which has worked with Croydon Council to successfully convert a long-term empty office building into high-quality, modern and energy-efficient homes for homeless households
- Newbridge Advisers on the role of different financing routes and delivery models for local authorities
- Resonance on the potential benefits of leasing models tied to social impact investment
- Lambeth Council on the adverse consequences of TA on the availability of privately rented homes
Our event proved enormously popular and generated much discussion, which sadly did not come as a surprise to us, given the escalating costs involved in providing TA.
Rising costs
Shelter’s recent analysis of official data for 2024/25 shows that more than £2.8 billion was spent by local authorities on providing TA – a figure which has more than doubled (+118%) in the past five years.
Of particular concern are the sums being spent on nightly paid, self-contained accommodation (over £1 billion) and B&Bs and hostels (£844 million).
These are typically the least suitable forms of TA as they are often characterised by a lack of key amenities and private space, which has damaging effects for children, vulnerable people and those facing the trauma of having recently lost a permanent home.
In some respects, this is a story that has become all too typical of many of our country’s public services, stretched by over a decade of austerity and buffeted by the successive impacts of Brexit and the pandemic.
Extortionate costs, ever-rising demands and worsening outcomes for individuals could just as easily describe the current situations in special educational needs, social care, asylum, or prisons and probation.
was spent by local authorities providing temporary accommodation in 2024/25 (up 118% in the past five years)
Need for reforms
During November’s hotly anticipated Budget Statement, the Chancellor acknowledged the huge costs of TA to local taxpayers and the negative impact it has on child poverty in her justifications for removing the two-child benefit limit. Those anticipating reforms to the Local Housing Allowance (LHA) were left disappointed though, as the planned freeze is set to continue until at least April 2027, meaning more households are likely to face ever-growing shortfalls between market rents and the support they are eligible to receive with their housing costs. Even the widely-respected Institute for Fiscal Studies referred to this recently as ‘Bad Policy Design’.
Of course, the long-term solution is to provide more permanent affordable housing, which has been recognised through the relatively generous settlements made via the new Social and Affordable Homes Programme and National Housing Bank, as well as various planning reforms aimed at accelerating housebuilding. But these will take some time to come to fruition and will be of little comfort to those currently living in TA.
Many campaigners and commentators have quite rightly pointed to the counterproductive role of housing benefits in driving the TA crisis. In particular, the rate at which the LHA is set and the confirmed freeze until at least April 2027, both of which serve to decrease the availability of lower-cost private rented housing.
The likelihood of the LHA being revised seems slim in the context of recent U-turns on the Winter Fuel Allowance and Personal Independent Payments, which increase pressure on other parts of annual managed expenditure on welfare.
One aspect of the LHA which is in desperate need of reform is the current ‘subsidy rule’ through which local authorities can only claim back 90% of the January 2011 LHA rate (plus a management cost element) for most forms of TA.
Suffice to say, the UK economy and housing market have changed hugely since 2011, and this simply adds to the profound financial pressures facing local authorities. It diverts resources from local areas, which would surely be better spent on homelessness prevention and increases the risk of more costly intervention to rescue struggling local authorities. Now should be the time to make such a change.
“One aspect of the LHA which is in desperate need of reform is the current ‘subsidy rule’ through which local authorities can only claim back 90% of the January 2011 LHA rate (plus a management cost element) for most forms of TA.”
