Despite record numbers of people living in temporary accommodation, there are significant gaps in available data on its costs. Gaps in data mean that the true scale of spending on temporary accommodation is likely to be under-reported. 

We know that, as of March, there were 117,450 households in temporary accommodation in England - including 151,630 children. In some parts of London, one in ten children grow up in temporary housing. 

Our analysis suggests that, due to variation between local authorities in how they record this spending, the financial cost is even higher than reported. 

Total reported spending on temporary accommodation in England in 2023-24 was £2.29 billion, which constitutes around three quarters of all spending on homelessness. Our analysis indicates that the actual figure is likely to have been at least £100 million higher, at £2.42 billion. 

It is also worth noting that often in areas with the highest housing costs “temporary” accommodation is anything but short term - almost half of people resident in temporary accommodation leased by a local authority or registered provider in London have been there for at least five years. 

Although we can question the robustness of available data on temporary accommodation spending, focused analysis does still bring to light findings which highlight the scale of the challenge facing local authorities. Notably, not only has demand for temporary accommodation increased, but so too has its unit cost, with an especially sharp increase over the past year. 

Our assessment found that between 2018-19 and 2023-24r the unit cost of temporary accommodation rose gradually overall, by 4.5% in real terms, but then rose considerably between 2022-23 and 2023-24, by 11%. This is perhaps a reflection of the increasingly limited options available to local authorities for providing accommodation to people experiencing homelessness, reflected in the increased use of the most expensive forms of temporary accommodation, such as Bed and Breakfasts. 

Also highly striking is that the proportion of spending on temporary accommodation borne by local authorities has risen considerably, growing from £479 million in 2028-19 to £1.05 million in 2023-24 - a real terms increase of more than 80% over five years. This means that the burden of paying for temporary accommodation increasingly sits with local rather than national government. 

It would be naive to suggest that the financial picture depicted by our analysis appears anything other than highly challenging. There are, however, some potentially interesting glimmers of hope to build upon. One in particular is that it appears that some regions of the country appear to be deriving better value for money than others from their use of temporary accommodation than others. London boroughs, for example, typically pay around 15% more for temporary accommodation than the private rented sector. This contrasts with a gap of 210% in local authorities in Yorkshire and the Humber on average.

Accurate data is integral to the implementation of good public policy.  Our report concludes by making recommendations for government to improve the collection of data on spending on temporary accommodation as well as how this is used. Key recommendations include government improving its checks on the data that it receives and working with local authorities to collect and publish information on unit costs, thereby enabling local authorities to benchmark their costs and learn about how to improve them. 

In every local authority we have worked in with our value for money work we have found that the effectiveness of spending on temporary accommodation can be improved through better collection and use of data. At a national level, the lack of reliable information has the potential to impede the development of homelessness policies that are genuinely built on evidence. We hope that with this work we will make a contribution to improving the knowledge that is available on such a crucial issue and, in so doing, improve the evidence base for homelessness policies in England. 

• Matthew Wilkins is Head of Value for Money at the Centre for Homelessness Impact
• The image used in this blog is of Russ and Selma who were placed in temporary accommodation for 10 and a half months with their teenage daughter. Their image is part of our free library of non-stigmatising images of real people who have experienced homelessness. Image credit: Centre for Homelessness Impact / Jeff Hubbard