Temporary accommodation costs soar as councils warn of mounting pressure

An association has warned the use of temporary accommodation is becoming “financially unsustainable” as they call on the next Prime Minister to offer long-term solutions.

Data by the Local Government Association (LGA) reveals council spending on housing homeless families in temporary accommodation has surged by more than 1,000% over 13 years.

Councils have spent more than £6 billion in total, with £2.2 billion spent in 2023/24 and 2024/25 alone.

Huge leak in council budgets

Cllr Eamonn O’Brien, chair of the LGA, said: “Temporary accommodation is a huge leak in council budgets that needs to be patched quickly and, at its heart, transform the lives of families and children across the country.

“While the government’s focus on prevention has been encouraging, we need both swift action and long-term solutions from the next Prime Minister and their administration.

“The way that councils are reimbursed by central government is not working, and it’s impacting the entire country due to the knock-on effect on budgets and all other services.

“The increasing use of temporary accommodation is not only financially unsustainable for councils but is hugely disruptive for individuals and families placed in them.

“Ensuring there are sufficient homes for people is the foundation for strong communities, as our plan to tackle homelessness shows, councils are a key player in this effort and we look forward to working with the government towards this goal.”

Temporary accommodation spending rises

According to the data, temporary accommodation spending continues to be concentrated in London, but there are clear signs of growing pressure across the country.

London’s spending has risen from £59.5 million to £739.9 million, a 1,143% increase. The biggest percentage rises were recorded in the East Midlands (4,182%), West Midlands (1,539%), and South East (1,339%).

Every region recorded a substantial increase, with rises ranging from 398% in the South West to more than 4,000% in the East Midlands, highlighting the growing financial strain on councils.