Temporary Accommodation in London: Local Authorities under Pressure Julie Rugg February 2016 A report prepared for London Councils Disclaimer Views expressed in this report are not necessarily those of the University of York, the Responsibility for any errors lies with the authors Copyright Copyright for this research is held by the University of York. ii Contents Disclaimer _____________________________________________________________________________ ii Copyright ______________________________________________________________________________ ii Contents _______________________________________________________________________________iii Acknowledgements _____________________________________________________________________ vi Executive summary_____________________________________________________________________ vii Principal finding................................................................................................................................................. vii Introduction....................................................................................................................................................... vii Temporary accommodation policy development............................................................................................. viii The current TA market: demand and supply ....................................................................................................... x Costing the use of temporary accommodation .................................................................................................. xi Delivering TA: borough officers’ views .............................................................................................................. xii Conclusion and recommendations ....................................................................................................................xiii 1. Introduction ________________________________________________________________________1 Introduction.........................................................................................................................................................1 Background..........................................................................................................................................................1 The London housing market.............................................................................................................................1 Changes in welfare provision ...........................................................................................................................5 Increase in homelessness acceptances ............................................................................................................8 Temporary accommodation in London............................................................................................................9 Research questions ............................................................................................................................................10 Research method...............................................................................................................................................11 Outline of the report..........................................................................................................................................12 Conclusion .........................................................................................................................................................13 2. Temporary Accommodation policy development_______________________________________14 Introduction.......................................................................................................................................................14 Using the private rented sector to meet low-income housing need..................................................................14 Temporary accommodation policy framework .................................................................................................16 Financing TA ......................................................................................................................................................16 Housing benefit subsidy .................................................................................................................................17 Homelessness Prevention Grant ....................................................................................................................19 The shift to nightly rates....................................................................................................................................19 Managing the nightly rates market...................................................................................................................20 Out of borough placements...............................................................................................................................21 Inter-borough procurement...............................................................................................................................22 iii Nzolameso v City of Westminster......................................................................................................................22 Conclusion .........................................................................................................................................................23 3. The current TA market: demand and supply___________________________________________25 Introduction.......................................................................................................................................................25 Overall demand .................................................................................................................................................25 Changing nature of demand..............................................................................................................................26 Managing procurement.....................................................................................................................................27 Change in property supply.................................................................................................................................27 Conclusion .........................................................................................................................................................30 4. Costing the use of temporary accommodation _________________________________________31 Introduction.......................................................................................................................................................31 Research on TA costs .........................................................................................................................................31 Costing method .................................................................................................................................................32 Data collection...................................................................................................................................................33 Caveats ..............................................................................................................................................................34 Elements included in the calculation .................................................................................................................34 Expenditure....................................................................................................................................................35 Income............................................................................................................................................................38 Gross costs and LA contribution ........................................................................................................................39 Conclusions........................................................................................................................................................39 5. Delivering TA: borough officers’ views _______________________________________________41 Introduction.......................................................................................................................................................41 Borough-specific factors influencing TA ............................................................................................................41 Local tenure mix.............................................................................................................................................41 Strategy ..........................................................................................................................................................41 Economic upturn............................................................................................................................................42 The demographics of TA demand......................................................................................................................42 Change in the TA portfolio.................................................................................................................................43 The London housing market ..............................................................................................................................43