‘Spiralling’ temporary accommodation costs set to double to £45m in the next year

Charities fear that the current level of spending will put additional strain on budgets, diverting crucial funds from homelessness prevention and support

The average UK house price rose by 0.1% in April month-on-month, after a fall of 0.9% in March, according to Halifax
Spending on temporary accommodation has soared in the last five years (Gareth Fuller/PA)

After soaring over the last five years temporary accommodation costs could be set to double in the next year, the Department for Communities has been advised.

According to data obtained through a Freedom of Information request, spending on emergency accommodation has soared from £5.8m in 2018/2019 to £23.7m in 2022/23.

And projections prepared by the NI Housing Executive indicate these costs will continue to rise, with the latest estimate suggesting that the bill for 2024/25 could reach £45.8m.

The projected figure was presented to the Department for Communities during a departmental management meeting on January 17.

During the meeting the department was given an update on “increasing levels of homelessness” and “the increasing number of refugees presenting in Northern Ireland through the Asylum Seeker process and the corresponding risk of more pressure on the system” was highlighted.

Temporary accommodation is allocated by the NIHE to households who are legally homeless until a more permanent housing solution can be secured.

Figures provided by the Housing Executive show that more than 37,000 households have been placed in temporary accommodation in the last five years.

The 2022/23 financial year alone saw more than 10,200 placements and projected costs indicate that the Department for Communities expects to see these numbers climb.

According to the homelessness bulletin published by the Department for Communities in January, only 56 people were housed in temporary accommodation for five years or more in January 2019.

But this figure has been rising with almost 279 people, including 18 housed in hostels, living in temporary accommodation for five years or more in January 2024.

Nicola McCrudden, Chief Executive of Homeless Connect, a charity representation organisations workings with people facing homelessness said that spending on temporary accommodation was “spiralling”.

“We are very concerned about the sharp increase in the number of people who find themselves needing temporary accommodation because of homelessness,” said Ms McCrudden.

“The spiralling level of spend on temporary accommodation in the private sector, whether that be single lets, hotels and B&Bs illustrates the crisis we are facing because of social housing shortages.”

In the last five years spending on non-standard accommodation, which includes hotels and bed and breakfasts, has climbed from £912,448 to £7.6m.

Accounting for over half the overall bill spending on single lets, units leased from private landlords or companies, climbed from £3.8m to £15.5m.

“At the same time, we are not seeing proper funding investment needed for temporary accommodation and floating support providers in the not for profit sector,” added Ms McCrudden.

“Government is very aware of the impact of years of no inflationary uplifts to the Housing Executive’s supporting people programme which is leaving many charities operating at risk with questions around the future of services.

“Overall, the level of spend on temporary accommodation is growing at such a rate that it will place budgets under severe pressure with consequences in other areas. Much needed funding for homelessness prevention and support services will be diverted, which ultimately will have a knock on effect on health and justice budgets.”

And she added: “Worryingly, the budget allocations for the Department for Communities hold out scant hope of the funding needed to reverse the trend of ever rising numbers of households in temporary accommodation.”

According to the latest report published by the NI Fiscal Council, almost all department are facing a cut in capital funding, but at 38% the Department for Communities faces the biggest cut.

A spokesperson for the Department for Communities said: “The Minister has outlined his ambition to prioritise prevention of homelessness, working with the NIHE and the sector to ensure that homelessness is rare, brief and non-recurrent.

“The Minister recognises that it will take time – and a collective effort – to achieve this ambition, particularly given the ongoing cost of providing temporary accommodation, which is increasing for a range of reasons.

“However, the short-term focus must continue to be supporting those currently in crisis.

“Alongside this, the Department has taken forward a broad range of initiatives to address the wider issue of housing provision and need. This work is ongoing with stakeholders, statutory organisations and residents, with the involvement of government at all levels.”