Homelessness is a pressing issue in England, with the situation worsening in recent years. By December 2023, more than 309,000 people were recorded as homeless, including nearly 140,000 children. New figures from the Ministry of Housing, Communities and Local Government today show that the number of households facing homelessness has exceeded (320,000) between 2023-2024. This crisis not only causes immense personal hardship for those affected but also places a heavy financial strain on local authorities and public services. A key aspect of this issue is the extensive reliance on temporary accommodation (TA), often involving unsuitable options such as nightly paid stays, privately managed accommodation, hostels, and bed and breakfast hotels. While these solutions are frequently used, they are both costly and unsustainable. The expenditure on temporary accommodation placements across England rose from £1.4 billion in 2018–19 to £1.8 billion in 2022–23. According to the Centre for Homeless Impact, total reported spending on TA in England during 2023–24 was £2.29 billion. However, their analysis estimates that the actual cost of TA for the same period was closer to £2.42 billion.
Despite its prevalence, TA is an expensive, reactive solution to homelessness that does little to address the root causes. Rehousing initiatives and other alternative approaches have shown potential for greater housing stability and cost-effectiveness5,6. However, more robust evidence is needed to evaluate their long-term impacts across various populations and contexts.
The government’s commitment to building 1.5 million homes is a central part of its broader policy agenda. Yet, the lack of specific targets for social or affordable housing has raised questions about whether these ambitions will meaningfully address homelessness. The media and public debate increasingly highlight the inefficiency of spending vast sums on TA and housing benefit rather than prioritising prevention and wraparound support. However, there is limited evidence quantifying the scale of this inefficiency or demonstrating how a preventative approach could be implemented more effectively.
This study aims to address these gaps by focusing on the primary TA solutions currently in use—nightly paid, privately managed accommodation, hostels, and bed and breakfast hotels—and evaluating their impact on public budgets. The main goal of this research is to evaluate the cost-effectiveness of alternative solutions to homelessness compared to the current reliance on temporary accommodation. Specifically, the study objectives are threefold:
- Assess the expenditure on unsuitable TA and its broader financial and social impact, including potential effects on productivity and other public budgets.
- Investigate the potential savings and benefits of prevention services, converting properties into affordable housing, and constructing new social homes.
- Provide evidence-based recommendations to guide more efficient and impactful strategies for addressing homelessness.
It also explores more sustainable and effective alternatives, offering a cost-benefit analysis of approaches that shift the focus from reaction to prevention. The findings will provide valuable insights for policymakers and local authorities, helping to chart a path toward a system that prioritises long-term stability over temporary fixes.