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Variations in Homelessness Reduction Act funding revealed

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Funding made available to councils to tackle homelessness using new legal duties is to vary by up to £373 per homeless household between different regions, LGC analysis reveals.

Councils were last week told how much of a share of almost £73m new burdens funding they will receive for implementing the Homelessness Reduction Act, which comes into effect in April.

The money – which ministers have topped up by £11.7m on top of the £61m previously earmarked – is to be spent between now and 2019-20 on preventing a greater range of residents from becoming homeless, not just those deemed to be in priority need.

LGC used Department for Communities & Local Government data to compare the allocations to how many households were accepted as being homeless and in priority need in 2016-17 as an indicator of the likely pressure on the funding.

About £25m is to be shared among 326 councils in 2017-18 with similar amounts planned in the following years.

London is to receive the most overall - about £30m, £10.8m of which is for 2017-18. Boroughs in the capital will also receive the most as an average per homeless household.

RegionAverage funding per homeless household in 2017-18
London £601
North East £517
South East £442
South West £411
East £367
Yorkshire and Humber £334
North West £310
East Midlands £282
West Midlands £228

DCLG’s methodology for allocating new burdens funding took into account homelessness statistics, councils’ finances, population estimates, and the department’s index of multiple deprivation average scores.

The regional averages mask some wild variations between individual local authorities. Harrogate BC is set to receive the least amount of funding per homeless household in each of the three years at an average of £91 per casewhile at the other end of the scale Camden LBC will have £4,783 to spend per homeless household next year.

Despite receiving the most funding, London Councils has estimated the legislation alone will cost £77m a year to implement in the capital. This feeds into boroughs’ overall estimate that they will need to collectively spend £132.7m in the coming financial year to adequately discharge all of their homelessness duties.

Lewsiham LBC mayor Sir Steve Bullock (Lab), London Councils’ executive member for housing, said: “It is helpful that the government has assessed that costs will be higher than originally thought but without a cross-departmental look at the impact of welfare reform on homelessness their assessments will remain incomplete, resulting in the buck being passed to councils.”

At the other end of the scale, the West Midlands looks set to receive the least amount of funding per homeless household despite the fact it had the second highest number of homeless households last year – about 8,300 compared to about 18,000 in London.

West Midlands mayor Andy Street (Con) has made tackling homelessness a priority.

A combined authority spokesman said the methodology and allocations had been “transparent” but added this funding is “a small part of the overall picture in terms of tackling homelessness”.

“Here in the West Midlands Combined Authority we are currently in advanced conversations with government over some specific interventions, including the piloting of ‘housing first’ in our region,” he said.

Manchester City Council – where there were 1,242 homeless households last year – is in the bottom 10 for funding per homeless household in each of the three years despite receiving almost £510,000 over that period which puts it into the top 10% for new burdens funding allocations overall.

However, the government announced two weeks ago that Greater Manchester CA is to receive almost £3.8m to develop a city region-wide approach to tackling homelessness as part of a “trailblazers” programme that will eventually cover 28 areas which will each receive a share of DCLG’s £50m homeless prevention fund.

A DCLG spokesman said: “We’ve have worked with local authorities and the Local Government Association to test the methodology behind how we allocate this funding, reflecting the differing need in different authorities. The funding has been allocated according to a formula which reflects where resource pressures are likely to increase as a result of administering the new duties contained in the act”.

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