Welfare reforms such as the capping of Local Housing Allowance has led to an increase in homelessness, a damning report from the National Audit Office (NAO) has warned today.

The report also said the Government has failed to monitor the impact of reforms on homelessness and does not have a cross government strategy to tackle the problem.

The NAO said the ending of private sector tenancies was now the biggest single driver of statutory homelessness in England, accounting for 74% of the households who qualify for temporary accommodation.

Amyas Morse, head of the NAO, said: ‘Homelessness in all its forms has significantly increased in recent years, driven by several factors. Despite this, government has not evaluated the impact of its reforms on this issue, and there remain gaps in its approach.

‘It is difficult to understand why the Department persisted with its light touch approach in the face of such a visibly growing problem. Its recent performance in reducing homelessness therefore cannot be considered value for money.’

The NAO added the ability of local authorities to respond to increased homelessness is constrained by the limited options they have to house homeless families.

In response, Matt Downie, director of policy and external affairs at Crisis, said: 'The NAO demonstrates that while some parts of government are actively driving the problem, other parts are left to pick up the pieces, causing misery for thousands more people, as they slip into homelessness. This is in part down to government decisions on Local Housing Allowance, making housing unaffordable for those in greatest need, while councils struggle to rehouse people.

He added: 'While the Homelessness Reduction Act coming into force next year will address this preventing many from becoming homeless in the first place, it must be implemented with cross-government working and a genuinely affordable housing supply.'

Homelessness costs the public sector more than £1bn a year, with £845m spent on temporary accommodation. The number of households in temporary accommodation has risen by 60% since March 2011 to 77,240 households.

TCllr Martin Tett, the LGA’s housing spokesman, added: 'Rising homelessness is a huge challenge for councils, which are having to house the equivalent of an extra secondary school’s worth of homeless children in temporary accommodation every month.

'The net cost to councils of doing this has tripled in the last three years, as they plug the gap between rising rents and frozen housing benefit.'

A DCLG spokesman said the department was investing £550m to 2020 to tackle homelessness and claimed welfare reforms ‘restore fairness to the system with a strong safety net to support the most vulnerable’.