Temporary accommodation for homeless people to cost council more than £1m

The cost for one Welsh council to provide temporary accommodation to house homeless people is set to top £1m this financial year

A report for Merthyr Council’s regeneration and public protection committee on Tuesday, September 10 outlines the latest situation with homelessness and housing in the county borough and says that the expenditure on temporary accommodation is expected to be £1.24m for 2024/25.

This is up from £183,947 pre-pandemic in the financial year 2019/20 and the gross cost in 2023/2024 was £2.67m.

As of August 9, 2024, the council had 144 households (99% of which were single people) accommodated across its local and out of county temporary accommodation.

Costs

The authority’s temporary accommodation expenditure has increased from £183,947 pre pandemic (2019/20) to £1.24m for 2024/25 which includes savings if it stops the use of some B&Bs for temporary accommodation from October 1 this year.

The gross spend on temporary accommodation for 2023/2024 was £2.67m.

The projection includes estimates on housing benefit income at 9.5% recovery and does not consider significant increases in demand that could happen or costs for additions such as storage or cost of damages in B&Bs.

A reduction in B&B usage and associated security costs from October is projected to save around £427,000 for 2024/25 and £871,000 for 2025/26 also relies upon the council being able to increase its use of HMO  accommodation, which costs the authority £35-40 per person per night and is significantly less than an average B&B placement which is an average of £65 per person per night plus security.

The report said that there have been dramatic increases in expenditure since the pandemic from March 2020, reflecting the increasing number of cases requiring temporary accommodation.

It said: “It is felt that changes made to homelessness legislation during the pandemic and the on-going legislative reform which seeks to make these changes permanent by the end of this Senedd term (May 2026 at latest) will have inevitably contributed to this and have brought about unintended consequences on the demand for homelessness services.”

It added that due to a lack of affordable single-person accommodation in the county borough, move on accommodation is extremely limited and there is insufficient registered social landlord stock available to meet the current demand.

It said people remain in B&Bs for extended periods of time and that the council envisages that many people will remain in B&Bs and other temporary accommodation for up to 18 to 24 months on average until an offer of suitable permanent accommodation can be made

Legislation changes

The  report said that  despite the proposal of increasing the use of HMOs being approved at full council in April 2023, the service continues to experience barriers in being able to acquire these at the pace needed.

It said: “We are currently heavily dependent on B&B/hotel accommodation, however, there is no formal contract with any B&B, and there is no guarantee of continued availability going forward.

“Additionally, proposed legislative reforms by the Welsh Government will restrict the use of this type of accommodation by councils, except in the event of public health emergencies.”

It added that the Welsh Government has made a clear commitment to reform homelessness provision to focus on prevention and rapid rehousing and that following the consultation throughout early 2024, despite significant lobbying and concern raised through local authorities and the WLGA, the legislative changes being proposed continue to progress which will reinforce the policy message that they are not going back to the pre pandemic approach.

Once approved this is likely to impose a duty on authorities to provide temporary accommodation to anyone presenting as homeless similar to measures introduced during the pandemic, the report said.

Consequently, the council expects that the number of people presenting as homeless “will not reduce to manageable levels anytime soon.”

Throughout the Welsh Government consultation process, all authorities have collectively expressed concerns about the additional pressures that may exacerbate services already at a breaking point, the report said.

And it said that The Suitability of Accommodation Order 2015 is also likely to be amended which will prevent the use of B&B and hotels for use as temporary accommodation in any circumstance except for public health emergencies.

What the council is doing to address the issue

The council has several live and future strategic developments planned including Cefn Isaf, Springfield Rise, Haydn Terrace, Wesley Methodist Church, Linc Extra Care, Dragon Park and Brynhyfred Chapel collectively providing 144 general needs homes and 60 extra care homes.

Merthyr Tydfil Housing Association (MTHA) has recently completed on a scheme of eight homes and are committed to delivering a further 51 homes by the end of the year with an additional 24 units scheduled for completion by early 2026.

In March 2024, Marsh House was completed, converting a former care home into 33 units of supported accommodation with a community hub funded through the Transforming Towns Fund from Welsh Government in partnership with strategic regeneration, Merthyr Valleys Homes, Pobl and the council.

A second supported accommodation development is being taken forward following the purchase of the Tregenna Hotel in partnership with Merthyr Valleys Homes through the Transitional Accommodation Capital Programme fund to provide a further 19 units.

In terms of HMOs, 29 properties have been run through the internal protocol and four properties have successfully passed with three now in use providing 12 bed spaces.

Refurbishment work is currently taking place on another which will provide an additional six bed spaces when complete in the coming weeks and a further two units are currently in with planning and will provide an additional 12 units of accommodation if approved, including two family units.

The 60-unit extra care scheme near Keir Hardie Health Park has regained momentum following delays resulting from a shortage of resources and staffing changes within Linc Cymru, the report said

Work is ongoing with a view to submit a planning application in around October 2024 with a potential start on site around September 2025 and completion around September 2027 depending on funding availability, ongoing progress and positive reports.

Grant funding

The council said it continues to refocus its Housing Support Grant funding of £3.14m per year with the priority being directing money towards additional supported accommodation units, aiming to reduce reliance on B&Bs and moving people into more suitable temporary accommodation with 24/7 support.

But due to limited grant funding in comparison to the borough’s level of deprivation, the council said it face challenges meeting all identified support needs so it has had to make “difficult decisions” in terms of decommissioning and remodelling some services to prioritise new supported accommodation,

The report said that the early intervention and prevention officers at the town centre hub are effectively helping households avoid homelessness more than the housing legislations requirement of 56 days in advance and by offering advice and support to secure private rental properties where affordable, they are also reducing dependence on social housing and preventing the need for temporary accommodation.

The report said that the growth of the  social housing grant allocation to £6.2 million this year and similar levels going forward, has allowed it to plan for larger sites having more units of affordable homes and providing much needed move on accommodation.

But despite this the length of stays in B&B has been prolonged which has proved challenging for the front-line and temporary accommodation manager to manage the behaviours of some of the more complex individuals.