Lambeth council is facing a significant financial challenge, with a budget deficit of £34.3 million due to the increasing demand for temporary accommodation by homeless families. Councillor David Amos, who oversees finance for the council, has called on the government to provide immediate assistance to address this crisis affecting not only Lambeth but also other local authorities.
The majority of the council’s overspending is attributed to the cost of nightly paid accommodation, such as hotels, for homeless households. With a legal obligation to provide housing for homeless families, Lambeth has seen a surge in the use of expensive temporary accommodation, with 78.3% of placements being in nightly paid options like hotels.
According to the council’s quarter one budget report, it is projected to spend £90 million on temporary accommodation by the end of the financial year in April 2025. This increased cost is expected to result in an overspend of over £28 million on housing services. Cllr Amos emphasized the need for a new financial settlement between national and local authorities to ensure fair funding based on actual needs.
The shortage of temporary accommodation has forced the council to explore alternative options, such as housing homeless families in Dover and Luton, to reduce costs associated with hotels. The rising expenses of temporary housing are not only straining the council’s ability to fund essential services but also impacting the overall support available to vulnerable individuals in the community.
In a broader context, London Councils reported that local authorities across the capital are collectively spending approximately £3 million per day on temporary accommodation. The escalating costs of housing and the lack of available properties are creating a challenging environment for councils to meet the needs of homeless individuals while maintaining other essential services.
As the financial pressure continues to mount, Cllr Amos highlighted the urgent need for central government intervention to address the crisis facing Lambeth and local authorities nationwide. The current funding system must be reformed to ensure a fair distribution of resources based on the actual requirements of each area. The sustainability of local services and the financial stability of local government are at stake, requiring immediate action to prevent further strain on essential services for vulnerable populations.
