Hastings Borough Council could be set to spend more than £1m on its homelessness service this year, a senior councillor has warned.
At a meeting of the council’s overview and scrutiny committee on Wednesday (November 28), councillors heard how the service had overspent by £142,000 in the first two quarters of this year.
Officers attributed the overspend to a number of factors including the high cost of renting temporary accommodation within the town and an increasing demand for housing.
These pressures could see the council’s total homelessness spend could hit £1m by the end of the year, cabinet member for housing and leisure Andy Batsford warned.
Cllr Batsford (St Helens) said: “There is a £142,000 overspend but that is above and beyond what we have already budgeted for so we are nearing a million pounds being spent on temporary accommodation and homelessness within the town.
“It is a huge financial issue for the council not only for the people it affects on a day-to-day basis.
“If somebody is placed into temporary accommodation we do get a payment for it, we get LHA plus [Local Housing Allowance] as a payment from central government, but that in no way covers the cost of private accommodation that we have to find.
“Due to the [limited] amount of accommodation out there available to place people, it is a real bidder’s market for the private landlords who are offering temporary accommodation. They are charging a very high rate for it.
“That’s why the costs are going up and up and up.”
Extra pressures added by new legislation
Cllr Batsford also spoke about the added pressures of the Homelessness Reduction Act – which introduced a number of new duties for local authorities – as well as a general increase in the number of families becoming homeless.
He described the situation as ‘a perfect storm’ both for the country and for Hastings in particular.
During the meeting, committee members heard how the council is in the process of purchasing property within the town to set up its own temporary accommodation places. A budget of £2.5m has been set aside for this purpose.
This is expected to reduce the council’s homelessness spending in the long-term, officers said, but savings would be dependent on the levels of demand.
Last month (October) the council’s cabinet agreed to purchase a property in Wellington Square to use as temporary accommodation. The property was already being used as temporary accommodation under a private contract prior to this agreement.
Overspend mainly on B&B accommodation
Earlier in the meeting, Cllr Mike Turner (Lab. – Baird) asked what effect the £664,000 rough sleeping grant would have on this budget pressure.
The funding had been jointly awarded to Hastings Borough Council and Eastbourne Borough Council in June for a project to reduce rough sleeping in both towns.
In response, council leader Peter Chowney said: “The £142,000 is primarily about an overspend on bed and breakfast accommodation because there are more priority households who are becoming homeless.
“The money we are getting from government, which Eastbourne and us have bid for, is slightly different.
“There might be a little bit of an overlap but [the government funding] is mainly going to rough sleepers and people who are single and homeless.
“That money there [the £142,000 overspend] is all being spent on people who are statutorily homeless, which are mostly homeless households and not people on the street. There might be a bit of overlap but I think they are really different things.”
Benefit sanctions and insecure tenancies blamed
In most cases people who are ‘statutorily homeless’, are being provided temporary accommodation after seeking assistance from a local authority.
Cllr Chowney added: “Let’s not be coy about the reasons this is happening. This is happening because of benefit sanctions [where] people are ending up on the streets because they can’t afford to pay their rent.
“It is also because of insecure tenancies, because at the end of a shorthold tenancy the landlord will kick you out.
“Go back ten years and the main reason people were becoming homeless was relationship breakdown. It is not now. It is benefit sanctions and the ending of shorthold tenancies.”