William Eichler 25 September 2025

Councils hit by £266m temporary housing funding shortfall

Councils hit by £266m temporary housing funding shortfall image
© Andrii Yalanskyi / Shutterstock.com.

Councils face a soaring bill for temporary housing as the funding gap widens by 30% in a year, the Local Government Association (LGA) has warned.

In 2023/24, councils in England spent £1.04bn on temporary accommodation but were only repaid £780m by the Department for Work and Pensions — leaving a gap of £266m. Over the past six years, that shortfall has accumulated to £1bn.

There are now 131,140 households living in temporary accommodation whose costs should be met via housing benefit. But under current rules, councils can only claim back 90% of Local Housing Allowance (LHA) rates based on 2011 rental values — a rate that hasn’t kept pace with modern costs.

The LGA is calling on Government to update the reimbursement formula, to base claims on current LHA rates rather than outdated ones, in order to ease pressure on council finances and protect homelessness prevention services.

SIGN UP
For your free daily news bulletin
Highways jobs

Senior/Principal Regeneration Officer

Fareham Borough Council
£45,465 - £55,379
Our town centre regeneration is moving from planning to delivery, and we're looking for someone who wants to help make regeneration happen. Fareham, Hampshire
Recuriter: Fareham Borough Council

Head of Service – Social Care

St Helena
£60k pa plus International Supplement
Enjoying unique lifestyle opportunities, St Helena Island is a self-governing overseas territory of the United Kingdom. Saint Helena, Ascension and Tristan da Cunha (SH)
Recuriter: St Helena

Health and Social Care Trainer - North Essex

Essex County Council
£29468.0000 - £34668.0000 per annum
Health and Social Care Trainer - North EssexPermanent, Part Time£29,468 to £34,668 per annum (full time equivalent) Location
Recuriter: Essex County Council

Recruitment Training and Support Officer (Fostering)

Essex County Council
£26284.0000 - £33256.0000 per annum
Recruitment Training and Support Officer (Fostering)Permanent, Full Time£26,284 to £33,256 per annumLocation
Recuriter: Essex County Council

Vocational Trainer - English

Essex County Council
Up to £34668.0000 per annum
Vocational Trainer - EnglishPermanent, Part Time£34,668 per annum (full time equivalent)Location
Recuriter: Essex County Council
Linkedin Banner