A HUGE rise in the number of people facing homelessness in Leicester means the city council is facing extra budgetary pressures of up to £54million.
The council, which declared a housing crisis in 2022, has seen an 87 per cent increase in the numbers of people facing homelessness since August 2022 – a trend mirrored in many councils across the UK.
While the city council successfully helps around two thirds of people who at risk of homelessness, a shortage of properties means that even the most urgent cases are spending longer and longer in temporary accommodation.
This is despite the city council having spent over £200million so far delivering 1,100 new council homes and working with partners to create more affordable housing.
The recently-launched Homelessness Strategy for 2023-2027 sets outs the ways in which the council is using prevention, intervention, recovery and partnership working to deal locally with the national homelessness crisis.
However, the combined effects of the cost of living crisis, escalating private sector rents and other increased costs means the council is facing a huge rise in people asking for help. Currently over 300 families are housed in temporary accommodation and bed and breakfast.
In addition, the city council is expecting to face further significant pressures on its services and its finances because of the Government’s action to speed up asylum decisions, known as the Streamlined Asylum Process (SAP). This may result in potentially up to 1,000 people who have been granted Government permission to stay in the UK, seeking homelessness help from Leicester City Council.
Overall the council is facing a budget pressure of up to £54m, which is beyond what the council can afford. An extra £1m was added to the £5m the council’s budget for homelessness services in 2023/24, but the actual cost of helping people in need and facing homelessness already vastly exceeds this.
The Government is also passing on the financial pressure of its £8m-a-day cost of hotel accommodation for asylum seekers to councils across the UK, it is providing them with no extra funding to do so.
Proposals are now being submitted to the city councils’ Special Overview Select Committee and Full Council in January 2024, setting out how it intends to continue to help those in need and to mitigate the massive financial threat it faces. However, even if all of the proposed actions are approved and successful the council is still likely to face increased financial pressure.
Actions needed to meet demand would involve increasing the amount of both temporary and permanent accommodation available, recruiting up to 25 staff, better targeting of help for rough sleepers to meet the needs of the most vulnerable, working with local partners to share the pressure and working with neighbouring councils to lobby the Government for more money.
Proposals include buying 225 more properties to be used as temporary homes to avoid the council having to place people in bed and breakfast accommodation and also leasing 125 new homes that would be used as permanent homes. Overall this would see the council investing a further £45m to help local people and those in need.
Leicester assistant city mayor for housing, Cllr Elly Cutkelvin, said: “We are trying to deal with a huge increase in demand from people facing homelessness, which is putting unsustainable pressure on both our finances and services.
“In addition, the Government’s decision to speed up asylum applications is essentially passing the responsibility and cost from them to local councils, many of which are facing the very real prospect of running out of money to be able to provide basic services.
“While Leicester has a long tradition of providing sanctuary to displaced people, the financial burden of doing so without additional Government funding would impact across the board, putting significant strain on services which have already been stripped to the bone by more than a decade of Government funding cuts.
“This report sets out the actions we need to take to invest in creating more short-term and permanent accommodation, to reduce the huge cost of putting families in B&Bs.
“Even with all the measures we are proposing, the council would still be facing additional pressures of between £6million and £12million every year, which is why it is vital we work with other local councils to call on the Government for realistic funding to be able to provide these vital housing and homelessness services.”