Homelessness in Wales ‘may rise to unprecedented levels because of cuts’

Martin Shipton

Homelessness in Wales may rise to previously unseen levels if real-term cuts announced for the housing sector are confirmed, according to one of the nation’s leading experts in the field.

Matt Dicks, director of the Chartered Institute of Housing Cymru, said it was “hugely disappointing” that the Welsh Government’s draft Budget had provided “cash-flat” funding for the Housing Support Grant.

On top of that, the indicative rise in homelessness support of £5m was reduced to £2m, making it more difficult for local authorities to provide support for people with complex problems including drug addiction that can impact their ability to pay their rent.

Housing crisis

Mr Dicks said: “It’s decimating the homelessness support budget basically, which is only going to result in more people being made homeless, at a time when we’re in the worst systemic housing crisis in living memory, with more than 11,200 people living in temporary accommodation, 3,500 of them being children.

“The implications are pretty severe on the homelessness front. If you’re taking away services from people with complex needs, those complex needs aren’t met, then the tenancy has a possibility of ending. If the tenancies are ending, then these people are homeless.

“The social housing sector in Wales is committed to working with the government and has a ‘no evictions to homelessness’ policy. But the needs that these people have are so complex that that doesn’t always mean it’s sufficient to cater for their needs and it doesn’t result in stopping homelessness. Then once they’re homeless, we don’t have a sufficient supply of affordable social housing in order to find them a place to stay.

“We’ve got almost 140,000 on waiting lists for social housing, so the last thing we want to do is be adding more people to that list when we haven’t got sufficient social housing to discharge our existing duties. It’s a precarious situation. I was speaking to some social landlords who provide services and they say it could mean a £1m black hole in their finances, and that means an end to these services. So what happens if these services end? Well more people are going to become homeless.

“The Welsh Government talks about pumping more money to help health services and the most vulnerable. We get that there’s a £1.3bn black hole in their Budget, but if the commitment to help the most vulnerable doesn’t tally with real-term cuts to housing. We would urge them to rethink the situation in the run-up to the final Budget.”

Investment

Mr Dicks said despite the cuts faced by the housing sector he recognised that the Welsh Government understood what needed to be done and had previously ploughed record levels of capital investment into social housing. He also acknowledged that it was becoming more difficult to spend the money on new housing because of supply chain issues and a labour shortage in the construction industry.

Mr Dicks said: “If we’re to build at the pace and scale we need to, then we probably need to see more investment on the capital side and more support on the capital side, driving up skills and driving up those supply chains, because that’s the only way we’re going to get away from this housing crisis – by building our way up to a situation where we have enough social housing to meet the demand that we have.

“The impact of high inflation has been that instead of £1m in the social housing budget being enough to build seven houses, it’s now only enough to build four. The original budget figure of £365m for social housing clearly isn’t worth nearly as much now. So we’re able to build fewer houses.”

Asked why there was a shortage of labour in the construction industry, Mr Dicks said: “It’s issues around Brexit, with a lack of European workers coming in, but it’s also the case that lots of contractors have gone out of business because of the inflationary pressures that have been created in the economy in the supply chain.”

Critical

He said he didn’t want to be too critical of the Welsh Government: “A stand-still budget is disappointing, but they’re doing better than some other places – in Scotland they’ve cut their affordable housing budget by 20%. They understand it, they’re ambitious, they have put capital investment into social housing, and they have committed to a standstill budget on homelessness support.

“But because of inflationary pressures it’s going to be problematic. 2.2% of the total Welsh Government Budget since 2006 per annum doesn’t seem to me like that’s commensurate with the level of the crisis we face. Ultimately housing has to be seen as a public health issue. That became evident in the pandemic. If we can’t house people, it has so many further impacts down the line on our communities, our health services and the cost of providing these services.

“Our call would be let’s try and make it the foundation issue that it needs to be and for that to happen we, along with our campaign partners Tai Pawb and Shelter Cymru, say let’s incorporate the right to adequate housing into Welsh law. That will provide the platform which will compel statutory bodies to bring forward the investment to meet the demand for housing that we have in Wales. A cost benefit analysis we commissioned with our campaign partners suggests that if everyone in Wales was adequately housed, the public purse would benefit by £11.5bn over a 30 year period.”

Developers

Asked whether he agreed with some campaigners that housing development was largely geared towards satisfying the needs of developers to make a profit rather than housing for people in need, Mr Dicks said: “Yes. That’s been very much the mantra at the UK level, because it’s been focussed on the demand side, creating demand for developers to bring forward developments to meet that demand. It’s in the developers’ interest to keep house prices high and that keeps land prices high and that makes the cost of building houses more expensive across the board, including social housing.

“We have a situation now where the ratio of social housing / private rented sector/ and ownership has kind of flipped. We now have 12% or so of social housing and then the private rental sector at 15-16% when two decades ago it was about 7 or 8% at a time when we had sufficient social housing. That changed in large part due to the Right to Buy scheme – 140,000 homes in Wales sold under Right to Buy, and now around 42% of those are in the private rental sector, many of which are being rented out to people on housing benefit at a higher cost than it would be if they were still in the social housing sector.

“So there are lots of historic issues that have contributed to this housing crisis. Ultimately we need to build more social housing – and then once we do that, have sufficient revenue support for people to maintain tenancies. This Budget won’t help. It’s a real terms cut at a time when record numbers of people are already in temporary accommodation because they have no home.”