Homeless services ‘face major crisis without cash boost’

Martin Shipton

New research from two housing bodies has laid bare the severe operational and financial pressures facing Wales’ homelessness and housing support sector.

A survey of 44 support providers and housing associations by Community Housing Cymru (CHC) and Cymorth Cymru shows that 83% are currently running services funded through the Housing Support Grant (HSG) and Homelessness Prevention Grant (HPG) at a financial deficit, as funding over recent years has failed to keep pace with inflation and surging demand.

As a result, over half of providers (57%) are relying on dwindling organisational reserves to keep services open, a practice that providers warn is sustainable for an average of just 1.5 years.

The grants play a vital role in preventing and alleviating homelessness, helping tens of thousands of people every year in Wales to recover from trauma. Services funded by HSG and HPG help young people leaving care, support people off the streets and enable people to flee domestic abuse.

Ahead of the Welsh Government’s draft budget, CHC and Cymorth Cymru are calling for a funding increase of 16% to cover the true costs of delivery, fair pay, and increasing support complexity.

An illustrative case study in the report shows how Hannah – not her real name – received vital support from Stori, a specialist housing provider that helps individuals live safely. Past experience of trauma and domestic abuse left her struggling with substance dependency, poor mental and physical health and debt. Providing a property alone was not enough: without wrap-around support, she could not sustain a home safely.

Over time, staff at Stori supported Hannah to access domestic abuse recovery programmes, engage with healthcare professionals, overcome substance misuse, manage finances and build connections in the community.

This package of support dramatically reduced Hannah’s need for crisis hospital admissions and police call-outs, replacing crisis interventions with planned, preventative support.

Hannah has since transitioned into her own permanent social housing tenancy, manages her healthcare independently and aspires to volunteer to help people overcome substance abuse.

Hannah said: “I wouldn’t be here if it wasn’t for the support from Stori.”

Jon Trubridge, Regional Operations Manager for Stori, said: “We support a lot of people who feel completely stuck when they come into our service, especially with long waiting lists for mental health and dual diagnosis barriers between services. Long-serving colleagues have noticed a massive increase in mental health complexity over the last two to three years.

“Without funding like HSG, the women, men, and families we support would be left in high-risk situations with nowhere to turn.”

Recruitment freeze

Other providers surveyed for the report say they may be forced to cut service capacity, freeze recruitment, make staff redundant or hand back delivery contracts without an adequate funding settlement, potentially leaving thousands of vulnerable people without a safety net.

Investing in housing support is seen by the sector as Wales’ ultimate prevention infrastructure. The sector says every £1 invested in the Housing Support Grant generates £1.40 in wider savings. That includes savings of £237m for the NHS and £206m for social care through preventing costly crisis interventions.

Katie Dalton, Director at Cymorth Cymru, said: “The Housing Support Grant and Homelessness Prevention Grant provide life-changing, and often life-saving, support to tens of thousands of people throughout Wales.

“However, these services continue to be under significant strain due to year-on-year increased demand and complexity, coupled with 15 years of funding constraints.

“If the Welsh Government is serious about prevention and tackling homelessness, this budget needs to be increased in 2027/28. Otherwise, services will be forced to reduce or even close, leaving people without the support they need to escape homelessness and abuse.”

‘Crucial stage’

Elly Lock, Head of Policy and Research at CHC, said: “Wales is at a crucial stage in its journey to end homelessness as it begins the process of implementing new, once-in-a-generation legislation.

“Prevention is at the heart of this approach, recognising the devastating effects that homelessness has on people’s lives and the pressures it places on public services.

“Housing support and prevention services are therefore more vital now than ever. Greater funding is needed to keep services open and avoid poorer outcomes for people across the country.

“Given housing associations’ role in tackling homelessness, we need a long-term plan to kickstart Wales’ housing recovery – ensuring everyone has a safe place to call home.”