Councils paying millions more for temporary accommodation in social housing shortage

Published

1 year ago

November 25, 2022

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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 also risen 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.

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.

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.”

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.

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.”

Business

Sub-postmaster victims and Royal Mail’s Dame Moya Greene alike don’t believe Paula Vennell’s account

Published

2 hours ago

May 22, 2024

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Sub-postmaster victims and Royal Mail's Dame Moya Greene alike don't believe Paula Vennell's account

The account of the Post Office’s former chief executive about what she knew during key years of the firm’s scandal is not believed by the former CEO of Royal Mail, the inquiry into the injustice has heard.

Paula Vennells has been giving evidence as part of a three-day appearance at the inquiry into the impact of faulty Horizon accounting software, which led to the prosecution of more than 700 sub-postmasters.

In addition to the wrongful convictions for theft and false accounting, many more sub-postmaster victims generated large debts, lost homes, livelihoods and reputations and suffered ill health. Some died by suicide.

Widely not believed

The inquiry heard that Dame Moya Greene, the former Royal Mail CEO whom Ms Vennells worked alongside for many years, texted Ms Vennells in January of this year to express her disbelief at the wrongdoing denials.

Ms Vennells has long maintained – and reiterated on Wednesday – that she was unaware of the extent of flaws with Fujitsu’s Horizon software.

Sub-postmasters listening to the inquiry in the Fenny Compton village hall in Warwickshire, where dozens of sub-postmasters met for the first time in 2009 as they began their fight for justice, also said they did not believe Ms Vennells.

“She is blatantly, utterly lying, and it’s got to stop,” former sub-postmaster Sally Stringer told Sky News.

Dame Moya texted Ms Vennells after the airing of the ITV drama Mr Bates Vs The Post Office, which reinvigorated interest in the scandal, saying: “When it was clear the system was at fault, the Post Office should have raised a red flag. Stopped all proceedings. Given people back their money, and then tried to compensate them from the ruin this caused in their lives.”

When Ms Vennells replied that she agreed, Ms Greene said: “I don’t know what to say. I think you knew”.

“I want to believe you. I asked you twice. I suggested you get an independent review reporting to you. I was afraid you were being lied to. You said the system had already been reviewed multiple times. How could you not have known?” her text said.

Why she says she didn’t know

The question of how it was that she couldn’t have known was taken up the the inquiry’s lead barrister Jason Beer KC.

Ms Vennells core argument emerged early in questioning: she said she wasn’t informed of bugs because of the way information flowed within the organisation. She accepted that as CEO she was in charge of how information was communicated.

“I was too trusting,” she said.

Emotional testimony

Ms Vennells broke down in tears numerous times during her evidence, the first of which was when Mr Beer read out details of sub-postmasters who were not convicted, as juries accepted there were flaws with Horizon.

The inquiry had just been presented with evidence of Ms Vennells telling MPs in 2012, “Every case taken to prosecution has found in favour of the post office. There hasn’t been a case investigated where the horizon system has been found to be at fault”.

This belief, Ms Vennells said, was “a representation of the information that I was given” rather than proof of an unwavering belief that nothing had gone wrong.

‘Wait and see’ accusation

Criticism came from Mr Beer over the fulsomemess of Ms Vennells cumulative 798-page witness statement.

He asked if she was adopting a “wait and see” approach: “Let’s see what comes out in evidence. See what I’ve got to admit and then I’ll admit that?”

“Given you provided a 775-page witness statement that took seven months to write, could you not have reflected on what you should have done fully and differently within the witness statement?” he added.

Ms Vennells’ statement said that with the benefit of hindsight, there were “many things” she should have “done differently”, but she would wait for the inquiry to conclude to expand on that detail.

But she denied adopting a “wait and see” approach.

Rather, “It was simply a matter of time,” she said. “The inquiry asked me, I think, over 600 questions to 200 or 300 with subquestions in each. I went through probably hundreds of thousands of documents.”

Evidence to Parliament in 2015

A major question going into the inquiry was how Ms Vennells was able to tell Parliament in 2015 there was “no evidence” of “miscarriages of justice”.

On Wednesday morning, Ms Vennells said that was what she had been told “multiple times” by Fujitsu – that nothing had been found in Horizon.

Comic relief

Back in the village hall in Fenny Compton there were moments of laughter when Mr Beer asked Ms Vennells if she was “the unluckiest CEO in the United Kingdom?”

His question was asked “In the light of the information that you tell us in your witness statement you weren’t given… the documents that you tell us in your witness statement that you didn’t see. And in the light of the assurances that you tell us about in your witness statement that you were given by Post Office staff”.

‘Exculpatory’ remembering

Another line of questioning from Mr Beer was that Ms Vennells had a better memory of events and records that made her and the Post Office look good and a worse recollection of things that made her and her organisation look bad.

“Why is it that in your witness statement, when you refer to a recollection of a conversation that’s unminuted, undocumented, not referred to in any email there are always things that exculpate you that reduce your blameworthiness?” he asked.

That wasn’t her approach, Ms Vennells said.

Signing off a £300,000 legal bill to go after a £25,000 loss?

Sub-postmasters and those following the scandal likely will be listening out to see if Ms Vennells approved the legal bill to prosecute Lee Castleton, who was featured as a victim in the ITV drama.

Earlier this month former managing director Alan Cook told the inquiry Ms Vennells approved legal costs of £300,000 to prosecute Mr Castleton for a supposed £25,000 shortfall when she was a network director at the Post Office.

Business

Inflation falls to 2.3% in April

Published

11 hours ago

May 22, 2024

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Health and care worker visa applications down 76% this year

The rate of price rises has dropped to 2.3% in April – the lowest in nearly three years and just above the Bank of England’s target, according to official data.

Inflation is at a low not seen since July 2021, the Office for National Statistics (ONS) said.

A month earlier, in the year up to March, the figure was 3.2%.

It’s now just above the 2% target set by the Bank of England and central banks across the world and will likely encourage the rate-setters to lower interest rates and make borrowing cheaper as a result.

A goal of 2% is set by central banks, whose job it is to ensure inflation sticks at that level, as it’s judged high enough so consumers avoid putting off purchases for fear of goods becoming cheaper and low enough that there’s price certainty.

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Government announce Anglesey as preferred site of new nuclear power station

Published

14 hours ago

May 22, 2024

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Government announce Anglesey as preferred site of new nuclear power station

Wylfa in North Wales is the preferred site for a major new nuclear power development, the government has announced.

Ministers are beginning talks with international energy firms to explore building the UK’s third mega-nuclear power station at the Anglesey site, according to the Department for Energy Security and Net Zero (DESNZ).

The department said the gigawatt nuclear power plant could provide enough clean power for six million homes for 60 years.

Britain has a target of generating a quarter of all electricity – around 24GW – from home-grown nuclear power by 2050.

The aim is part of the government’s plan to enhance energy security and deliver on net zero.

Currently, the UK generates about 15% of its electricity needs from nuclear capacity.

The Wylfa project could be similar in scale to Hinkley in Somerset and Sizewell in Suffolk, with hopes it would bring thousands of jobs and investment to the area.

Labour has accused the government of “dither and delay” on new nuclear at Wylfa, after Japanese giant Hitachi pulled out of a previous project there in 2019 because of rising costs.

Wylfa’s twin reactor Magnox nuclear power station, which went online in 1971, stopped generating power at the end of 2015 and has been decommissioned.

Energy Security Secretary Claire Coutinho said: “Anglesey has a proud nuclear history and it is only right that, once again, it can play a central role in boosting the UK’s energy security.

“Wylfa would not only bring clean, reliable power to millions of homes – it could create thousands of well-paid jobs and bring investment to the whole of North Wales.”

The UK is working to expand nuclear power through traditional large-scale plants as well as small modular reactors (SMRs), which supporters hope will be quicker and cheaper to construct.

Great British Nuclear aims to announce winning bidders in the tendering process to build SMRs by the end of this year.

But this is later than the spring timetable the government set last October for announcing the successful companies.

Tom Greatrex, chief executive of the Nuclear Industry Association, said the government is “absolutely right” to pursue more large-scale nuclear alongside the SMR programme.

He said: “Wylfa is the best site in Europe for a big nuclear project: It has an existing grid connection, the hard bedrock ideal for a nuclear power station, superior cooling water access, and some work to clear the site for large-scale construction was already done by the previous developer.”

Labour’s shadow energy minister Alan Whitehead said: “We welcome the government finally moving forward with a nuclear project identified by the last Labour government.

“But this should be the bare minimum – and celebrating a tentative step forward in 2024 on a project that should have been moving in 2010 tells you everything about this tired, snail’s-pace government.”