An extra £118m, at least, will be spent this year on temporary accommodation, such as hotels and B&Bs, by councils, a Sky News investigation has found.
If trends continue, local authorities in England will spend nearly a quarter more (24%) this financial year than pre-COVID-19.
Outside London, expenditure is on track to increase by 55%.
The number of families living in temporary accommodation (TA), as a proportion of the population, has alsorisen by 8%.
Around £309m was spent by councils on TA in the six months to September, and they are expected to spend well over £618m this financial year.
That’s compared with £500m in the year to March 2020.
The true figure will be much higher because out of more than 300 local authorities contacted, through freedom of information requests, only 180 responded with comparable data.
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The biggest increases in TA spending since before the pandemic have been in Yorkshire and the Humber and the South West.
The biggest rises have been in St Helens, Rossendale, Torridge, Sunderland and Wigan.
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Torridge district council, in Devon, one of the worst affected, has a forecast for TA expenditure of £1.1m this year, an increase of more than 2,000%.
Devon is a case study in itself, bearing the brunt of external housing market pressures.
There are 70% fewer properties available to rent there than in 2018 and the cost of rented accommodation has also risen by 42%.
It is also believed that in Torridge, a “tourist hotspot”, a “significant number” of properties are being let as holiday homes.
Torridge district councillor Rachel Clarke, lead for homelessness and housing need, told of “unprecedented pressures” with “modest reimbursement” from the government.
“The council is facing significant challenges in finding affordable rented accommodation for residents in temporary accommodation, and hence their stays in TA are longer,” Ms Clarke said.
“The cost pressures associated with temporary accommodation is by far the biggest cost pressure this council faces.”
Image: Sally O’Malley and her son Ollie were evicted from their privately rented home
More children in temporary accommodation
The latest government figures also show that the number of families with children living in TA in England, outside London, has risen by more than 20%.
Sally O’Malley and her son Ollie, 12, are one of those statistics.
They lived in a hotel, followed by a B&B, after she was made homeless through a “no fault” section 21 eviction.
She was told, like many are, that she would not be eligible for help from the authorities until the day she became homeless.
Ms O’Malley, 49, who is from Leeds, was evicted from her privately rented house and describes the ordeal as “traumatising” and “hell”:
“I wouldn’t wish it on my worst enemy… horrible. We got to the stage where I really wanted to give in,” she said.
“Then I’d beat myself up cos how could I think that with Ollie? I had no fight left. I didn’t want to do one more phone call, one more email. I totally lost myself, I was drowning.”
She is now in rented accommodation paid for through her housing allowance but, as it doesn’t cover the cost of rent, is topped up by the local council.
She is one of thousands going through a cycle of eviction, homelessness, temporary accommodation and then back into an expensive private rental sector.
The councils that responded to information requests have spent £1.98bn on temporary accommodation in the past three and a half years.
Image: Sean Gillespie, a landlord in Hull, says a ‘massive housing crisis’ is on the way
Rising rental costs and falling supply
The reasons behind the rise in costs is partly down to more homelessness in some areas, but also due to the rising cost of accommodation itself.
The supply of privately rented accommodation is dropping, which is partly pushing up prices.
Some councils are also struggling to find places to put people up in, which means they are having to resort to more expensive shorter-term lets.
Sean Gillespie has a portfolio of properties to rent in Hull and blames government legislation for a lack of stock as it forces landlords to sell up.
He claims the most damaging piece of legislation has been “section 24”, which came fully into force last year and means landlords are no longer able to offset financial costs against tax.
“Can you imagine a business, any business, where you can’t offset your costs? How is that possible? It’s now possible to make a loss as a landlord and still pay tax – it’s bonkers,” he said.
“We are not taxed on our profits, we’re taxed at our turnover. Where is the spare money?… We [landlords] don’t want a new Rolex, we just don’t want to sell someone’s house.
“Because that doesn’t help anyone. I really don’t know where people are going to live. There’s going to be a housing crisis. It’s in the post, a massive crisis, it’s catastrophic.”
Alex Diner, senior researcher of housing policy at the New Economics Foundation, describes temporary accommodation as a “national scandal”.
“We are throwing far more money at the symptom of the problem and far less on addressing the root cause of it,” he said.
“It’s economically illiterate and dysfunctional that we’re allowing ever-increasing amounts of money to pay for that, rather than dealing with the problem at source and building social and affordable housing that the country so desperately needs.”
Lack of social housing the key problem
At the heart of all this is one uniting factor: a distinct lack of social housing.
Think of the housing market as a vicious circle of inequality, with two things happening at the bottom.
One: unaffordable housing has driven more and more people on low incomes into the private rented sector.
Two: social housing stock has been sold off and not replaced and therefore benefit recipients have also been forced increasingly to privately rent.
The fact is the private rental sector has become a substitute for social housing.
In the middle of it, two converging groups of people have begun to compete for the same place to live.
Government figures show 25.7% of households in the private rental sector are in receipt of housing benefit.
If we built more affordable homes, and specifically more social housing, it would slowly take the heat out of the private rented sector and ultimately market sales.
Private rental has become a precarious and increasingly unaffordable sector and is one of the main reasons why taxpayers are spending billions on temporary accommodation.
From an economic perspective it may appear nonsensical, certainly in terms of “levelling up”.
Ultimately, an overreliance on the private rented sector, as more landlords sell up, will only serve to deepen social and housing inequality.
A government spokesperson said: “Temporary accommodation is a last resort, but a vital lifeline for those at risk of sleeping rough.
“We are giving councils £316 million this year to prevent homelessness and help ensure families are not left without a roof over their heads.
“We know people are concerned about rising costs, which is why we have announced the energy price guarantee, to support household with their energy bills over the winter, and a further £37 billion of support for those struggling with the cost of living.”
Thousands of motorists who bought cars on finance before 2021 could be set for payouts as the Financial Conduct Authority (FCA) has said it will consult on a compensation scheme.
In a statement released on Sunday, the FCA said its review of the past use of motor finance “has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers”.
“Where consumers have lost out, they should be appropriately compensated in an orderly, consistent and efficient way,” the statement continued.
The FCA said it estimates the cost of any scheme, including compensation and administrative costs, to be no lower than £9bn – adding that a total cost of £13.5bn is “more plausible”.
It is unclear how many people could be eligible for a pay-out. The authority estimates most individuals will probably receive less than £950 in compensation.
The consultation will be published by early October and any scheme will be finalised in time for people to start receiving compensation next year.
What motorists should do next
The FCA says you may be affected if you bought a car under a finance scheme, including hire purchase agreements, before 28 January 2021.
Anyone who has already complained does not need to do anything.
The authority added: “Consumers concerned that they were not told about commission, and who think they may have paid too much for the finance, should complain now.”
Its website advises drivers to complain to their finance provider first.
If you’re unhappy with the response, you can then contact the Financial Ombudsman.
The FCA has said any compensation scheme will be easy to participate in, without drivers needing to use a claims management company or law firm.
It has warned motorists that doing so could end up costing you 30% of any compensation in fees.
The announcement comes after the Supreme Court ruled on a separate, but similar, case on Friday.
The court overturned a ruling that would have meant millions of motorists could have been due compensation over “secret” commission payments made to car dealers as part of finance arrangements.
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Car finance scandal explained
The FCA’s case concerns discretionary commission arrangements (DCAs) – a practice banned in 2021.
Under these arrangements, brokers and dealers increased the amount of interest they earned without telling buyers and received more commission for it. This is said to have then incentivised sellers to maximise interest rates.
In light of the Supreme Court’s judgment, any compensation scheme could also cover non-discretionary commission arrangements, the FCA has said. These arrangements are ones where the buyer’s interest rate did not impact the dealer’s commission.
This is because part of the court’s ruling “makes clear that non-disclosure of other facts relating to the commission can make the relationship [between a salesperson and buyer] unfair,” it said.
It was previously estimated that about 40% of car finance deals included DCAs while 99% involved a commission payment to a broker.
Nikhil Rathi, chief executive of the FCA, said: “It is clear that some firms have broken the law and our rules. It’s fair for their customers to be compensated.
“We also want to ensure that the market, relied on by millions each year, can continue to work well and consumers can get a fair deal.”
The London-listed investment group ICG is closing in on a £200m deal to buy three of Britain’s biggest regional airports.
Sky News has learnt that ICG is expected to sign a formal agreement to buy Bournemouth, Exeter and Norwich airports later this month.
The trio of sites collectively serve just over 2 million passengers annually.
ICG is buying the airports from Rigby Group, a privately owned conglomerate which has interests in the hotels, software and technology sectors.
Exeter acted as the hub for Flybe, the regional carrier which collapsed in the aftermath of the pandemic.
The deal will come amid a frenzy of activity involving Britain’s major airports as infrastructure investors seek to exploit a recovery in their valuations.
AviAlliance, which is owned by the Canadian pension fund PSP Investments, agreed to buy the parent company of Aberdeen, Glasgow and Southampton airports for £1.55bn last year.
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London City Airport’s shareholder base has just been shaken up with a deal which saw Australia’s Macquarie take a large stake.
French investor Ardian has increased its investment in Heathrow Airport as the UK’s biggest aviation hub proposes an expansion that will cost tens of billions of pounds.
Some of the world’s leading tech companies are betting big on very small innovations.
Last week, Samsung released its Galaxy Z Fold 7 which – when open – has a thickness of just 4.2mm, one of the slimmest folding phones ever to hit the market.
And Honor, a spin-off from Chinese smartphone company Huawei, will soon ship its latest foldable – the slimmest in the world. Its new Honor Magic V5 model is only 8.8mm thick when folded, and a mere 4.1mm when open.
Apple is also expected to release a foldable in the second half of next year, according to a note by analysts at JPMorgan published this week.
The race to miniaturise technology is speeding up, the ultimate prize being the next evolution in consumer devices.
Whether it be wearable devices, such as smartglasses, watches, rings or foldables – there is enormous market potential for any manufacturer that can make its products small enough.
Despite being thinner than its predecessor, Honor claims its Magic V5 also offers significant improvements to battery life, processing power, and camera capabilities.
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Hope Cao, a product expert at Honor told Sky News the progress was “due largely to our silicon carbon battery technology”. These batteries are a next-generation breakthrough that offers higher energy density compared to traditional lithium-ion batteries, and are becoming more common in consumer devices.
Image: The Magic V5. Pic: Honor
Honor also told Sky News it had used its own AI model “to precisely test and find the optimum design, which was both the slimmest, as well as, the most durable.”
However, research and development into miniaturisation goes well beyond just folding phones.
A company that’s been at the forefront of developing augmented reality (AR) glasses, Xreal, was one of the first to release a viable pair to the consumer market.
Xreal’s Ralph Jodice told Sky News “one of our biggest engineering challenges is shrinking powerful augmented reality technology into a form factor that looks and feels like everyday sunglasses”.
Xreal’s specs can display images on the lenses like something out of a sci-fi movie – allowing the wearer to connect most USB-C compatible devices such as phones, laptops and handheld consoles to an IMAX-sized screen anywhere they go.
Image: Pic: Xreal
Experts at The Metaverse Society suggest prices of these wearable devices could be lowered by shifting the burden of computing from the headset to a mobile phone or computer, whose battery and processor would power the glasses via a cable.
However, despite the daunting challenge, companies are doubling down on research and making leaps in the area.
Social media giant Meta is also vying for dominance in the miniature market.
Image: Ray-Ban Meta AI glasses are shown off at the annual British Educational Training and Technology conference. Pic: PA
Meta’s Ray-Ban sunglasses (to which they recently added an Oakley range), cannot project images on the lenses like the pair from Xreal – instead they can capture photos, footage and sound. When connected to a smartphone they can even use your phone’s 5G connection to ask Meta’s AI what you’re looking at, and ask how to save a particular type of houseplant for example.
Gareth Sutcliffe, a tech and media analyst at Enders Analysis, tells Sky News wearables “are a green field opportunity for Meta and Google” to capture a market of “hundreds of millions of users if these devices sell at similar rates to mobile phones”.
Li-Chen Miller, Meta’s vice president of product and wearables, recently said: “You’d be hard-pressed to find a more interesting engineering problem in the company than the one that’s at the intersection of these two dynamics, building glasses [with onboard technology] that people are comfortable wearing on their faces for extended periods of time … and willing to wear them around friends, family, and others nearby.”
Mr Sutcliffe points out that “Meta’s R&D spend on wearables looks extraordinary in the context of limited sales now, but should the category explode in popularity, it will be seen as a great strategic bet.”
Facebook founder Mark Zuckerberg’s long-term aim is to combine the abilities of both Xreal and the Ray-Bans into a fully functioning pair of smartglasses, capable of capturing content, as well as display graphics onscreen.
However, despite recently showcasing a prototype model, the company was at pains to point out that it was still far from ready for the consumer market.
This race is a marathon not a sprint – or as Sutcliffe tells Sky News “a decade-long slog” – but 17 years after the release of the first iPhone, people are beginning to wonder what will replace it – and it could well be a pair of glasses.