COUNCILS are at breaking point and haemorrhaging funds to keep record numbers of homeless families off the streets, MPs warned yesterday, as ministers were urged to unfreeze local housing allowance rates.

In a report published today, the public accounts committee says a “crisis situation” has been reached, with local authorities increasingly unable to meet the soaring costs of providing temporary accommodation.

Councils are instead routinely prioritising short-term solutions such as putting up families in B&Bs, with the costs having risen from more than £1.6 billion in 2022-23 to about £2.1bn in 2023-24.

Committee chairman Sir Geoffrey Clifton-Brown said: “My committee is deeply concerned by the number of people currently being housed in sub-standard, overpriced and at times, wholly inappropriate accommodation, sometimes a long way from their previous home.

“A lack of affordable housing, a focus on short-term solutions and no clear strategy to tackle this issue have left us with thousands of families in deeply troubling circumstances.

“Worryingly there seems to be no desire to move away from an unsatisfactory short-term system, leaving local authorities attempting to save a sinking ship with a little more than a leaky bucket.

“We are calling for an overarching strategy that addresses the need for better connectivity across government departments to tackle the root causes of this crisis.

“Without one, we fear this will remain an issue into which money is simply poured, without effectively tackling the blight of homelessness.”

The latest official figures show that there were 123,100 households in England in temporary accommodation in the three months to the end of June 2024 — a rise of 16.3 per cent on the same period the previous year.

There were 159,380 children in temporary accommodation between April and June 2024, according to the Ministry of Housing, Communities and Local Government.

The committee said that many families are staying far longer than they should in B&Bs, intended for emergencies only and which by law should be used for no longer than six weeks.

“It is unacceptable that, as at June 2024, almost 6,000 households with children were being housed in a B&B, of which almost 4,000 had been there for longer than the statutory six-week limit,” it said.

The influential committee added that it is not convinced of the government’s limiting of local housing allowance rates, considering their subsequent impact on homelessness.

A freeze on rates — the maximum amount of housing support that claimants of universal credit and housing benefit can receive for private rented homes — has been extended until at least April 2026. 

The committee said 45 per cent of households now face a shortfall between their housing allowance and their rents, and called for the Department for Work and Pensions, which sets the rates, to share its justification for the levels, “both for individuals and for local authorities with regard to the temporary accommodation subsidy.”

A lack of housing supply and suitability of accommodation were also among the reasons some local authorities struggle to get people into temporary accommodation locally, said the committee.

Crisis chief executive Matt Downie said the report highlights the need for an ambitious homelessness strategy from government. 

He said: “We’ve heard stories of people having to heat up food on radiators to feed their family. 

“We need bold action to prevent more people facing homelessness and the upcoming government strategy is a huge opportunity to do this.

“We hope the government listens to the committee’s recommendations, especially the urgent need to end the intermittent freezing of allowance rates and to fund local authorities adequately.

“We know what needs to be done — it’s now a matter of acting immediately.” 

Local Government Association’s Adam Hug said homelessness is one of the biggest and most urgent pressures facing councils, as he called for better financial support from central government.

He said: “The temporary accommodation subsidy, currently stuck at 2011 levels, needs to be urgently addressed in the spending review as this is driving ever higher spending on temporary accommodation and limiting the resources available for homelessness prevention.”

A government spokesperson said it had inherited the crisis, and alongside £1bn in additional support, “our long-term housing strategy will go even further to fix this crisis by building the social and affordable homes the country needs as part of our Plan for Change.”