The £20million+ annual spend reflects the fact that Newham has the highest number of temporarily housed families in the country reports Ruby Gregory, Local Democracy Reporter

A mould covered wall and window — “One of the rooms in the Ali family’s old home, which was covered in mould and was a form of temporary accommodation Photo: Ruby Gregory LDRS”

An East London council has spent £7.4million more than it had budgeted on temporary accommodation because there are so many homeless families in the borough. Newham Council reported the overspend as part of its overall financial position for 2022/23 and said it was down to a “sharp increase” in nightly rate accommodation at hotels, according to a council document.

Some 7 per cent of the borough’s residents living in temporary accommodation are placed in hotels, which has put “massive pressure” on the council’s finances. Council officers said in a report: “[Commercial hotels] are generally only used as a last resort, but due to a lack of suitable supply of alternative accommodation, Newham have had to rely on hotels on an increasing basis. Rising from 2pc of nightly paid accommodation in April 2022 to 7pc at outturn, and this has exerted massive pressure on the [temporary accommodation] budget.”

The council had set aside £13.7m to spend on temporary accommodation this financial year, however it reported an actual spend of £21.1m – which is an overspend of £7.4m. The council said it is experiencing a “crisis in temporary accommodation” which has been made worse by the pandemic and the cost of living crisis.

Council officers said: “Coming out of the pandemic, with the removal of restrictions on evictions and its long-term economic effects, residents are also facing a cost of living crisis. It means those on low incomes face severe housing instability, compounded by a lack of supply and rising costs in the private rented sector.”

Just last month, the LDRS reported that Newham had the highest number of households staying in temporary accommodation in the country at 5,900. The council reported a £4.7m underspend across remaining departments and is using this to subsidise some of the temporary accommodation bill, which is why it is reporting an overall overspend of £2.7m.

Since 2022, the council has bought 203 homes and has been renting them out to homeless families trapped in temporary accommodation. The council has bought 80 homes in Donald Hunter House, 43 homes in New Market Place, 38 homes in Upton Gardens and 21 homes at a development in Plaistow.

Cllr Carleene Lee-Phakoe, cabinet member for housing needs, homelessness and private rented sector, said: “Newham is on the front-line of London’s housing crisis, with rising rents and a lack of affordable housing pushing more and more households into homelessness and the uncertainty of temporary accommodation. By investing in high-quality acquisitions such as New Market Place, we are providing vulnerable families with the security of a permanent home.”

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