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The LGA is calling on Government to update the reimbursement formula, to base claims on current LHA rates rather than outdated ones, in order to ease pressure on council finances and protect homelessness prevention services.
