Lambeth suffering as bills mount for providing temporary homes

By Robert Firth, Local Democracy Reporter

Lambeth council faces a £34.3 million budget black hole as its finances buckle under the soaring demand from homeless families for temporary accommodation.

Councillor David Amos, the Labour-run town hall’s lead for finance, told a cabinet meeting on Monday that Prime Minister Keir Starmer’s government needed to provide ‘urgent’ support to address the crisis facing the council and other local authorities.

The council’s overspend is overwhelmingly being driven by the amount it is spending on nightly paid accommodation like hotels for homeless households.

The council has a legal duty to house homeless families and, as of June, 78.3 per cent of its temporary accommodation placements were in nightly paid accommodation, such as hotels.

Lambeth’s quarter one budget report shows the local authority is expected to spend £90 million on such accommodation by the end of the current financial year, which ends in April 2025. The ballooning cost of temporary housing means the council is forecast to overspend on housing services by more than £28 million.

Speaking about the challenges Lambeth faces to balance the books, Cllr Amos said: “The sustainability of local services will face increasing pressures and local government’s financial sustainability will be tested like never before. A new settlement between national and local government is urgently needed.

“Central government must act to provide urgent support to address the crisis confronting Lambeth [and] fix the local government funding system to provide fairer funding based on meeting need.”

One in 30 households in temporary accommodation across the country were housed by Lambeth council in March. The number of homeless families supported by the council has surged by 50 per cent in the last two years to 4,600.

The budget report said the shortage of temporary accommodation meant the council was increasingly having to rely on expensive options to house families. Temporary accommodation providers were also increasing the cost of housing existing households, the report added.

In July, Lambeth revealed plans to house homeless families in the Kent town of Dover and Luton in Bedfordshire in an attempt to reduce the amount it spends on hotels.

Last month London Councils, which represents the capital’s 32 boroughs and the City of London, said local authorities across London were spending around £3 million every day on temporary accommodation. In 2023/24, 29 out of the capital’s 33 local authorities, overspent their homelessness budget.

Cllr Amos added: “Lack of supply in terms of properties and what we’re calling a broken market of increasingly expensive accommodation is putting pressure not only on our ability to fund this service but as a result on all other council services our most vulnerable rely on.”

Pictured top: Lambeth council town hall (Picture: Grainne Cuffe/LDRS)