Tower Hamlets is grappling with significant budgetary pressures, particularly in addressing homelessness, with a projected £16.9m overspend. The issue was brought to light during a recent Overview & Scrutiny Committee meeting, where officials discussed the council's budget monitoring for the fourth quarter of 2024/25.

The Budget Monitoring 2024/25 Quarter 4 report revealed that demand-driven pressures in homelessness, adult social care, and special education needs are significantly impacting the council's financial stability. According to the report, Adult Social Care faces a £6.0m overspend, and Special Education Needs & Disabilities (SEND) is dealing with a £2.6m pressure. To address the £6.0m overspend in Adult Social Care, the council is trying to increase capacity for the reablement service, provide therapy support in step-down beds, and ensure value for money in supported housing. To address the £2.6m pressure in SEND, the council is working to ensure timely advice across different agencies and monitoring performance.

Councillor Saied Ahmed, Cabinet Member for Resources and the Cost of Living, acknowledged the challenges and the administration's commitment to managing the situation. He also stated that he would like to see government intervention and additional support in this area, not just for Tower Hamlets but for all boroughs, especially in London. David, whose last name was not provided in the meeting transcript, further explained that the pressure is being driven by the Renters (Reform) Bill, which is causing landlords to withdraw their properties from the market. He noted that the Renters (Reform) Bill is driving landlords away from the market as they basically withdraw their properties to sell, which means we're seeing a reduction in properties that are available which is creating a particular pressure now.

The council is implementing several strategies to mitigate the homelessness budget pressures and address the root causes of homelessness, such as family evictions and domestic abuse. These include:

  • An acquisitions programme to increase the availability of council-owned homes.
  • Additional resources for the temporary accommodation procurement team.
  • Revising the incentive scheme for landlords to attract more properties and prevent friend and family evictions.
  • Designating 200 additional council homes for temporary accommodation.
  • Recruiting for project posts aimed at preventing homelessness.
  • Increasing the PRS supply with a target of 500 additional units in 2025/26.
  • Redesignating up to 200 void council homes as temporary accommodation during the calendar year 2025.
  • Promotional campaigns to increase the numbers of private landlords.
  • Training triage staff to make decisions on the day and only accept into T.A. where there is a clear legal requirement to do so.
  • Introducing grants to prevent homelessness.
  • Holding an agent/landlord event to promote the service and encourage new landlords to enter the homeless market.
  • Negotiating with existing landlords to reduce their rents charged where possible.

Despite the financial strain, the council is actively seeking solutions. David noted that the council is looking for long-term lets rather than expensive nightly paid accommodation. He also mentioned that the council held an event to engage with agents and landlords to secure more properties.

Councillor Ahmed emphasized the seriousness of the situation, stating that this is an area where he wants government intervention and additional support. He also said that the administration reviews the mitigation efforts monthly to control the overspend.

The Strategic Delivery and Performance Report Year Three Quarter 4 noted that the number of households in temporary accommodation has increased by 249 since the start of the year, with a total of 3,222 households in temporary accommodation. The main reasons for homelessness include family evictions, domestic abuse, and terminated private tenancies. The report also mentions that the cost-of-living crisis has increased family exclusions and reduced accessibility of private tenancies.

Despite the challenges, the council has managed to move families from bed and breakfast accommodation, complying with the legal requirement to limit such stays to six weeks. However, the increased use of nightly booked accommodation continues to pose a financial burden.

The Overview & Scrutiny Committee acknowledged the severity of the homelessness issue and the need for continued efforts to address the budget pressures and provide sustainable housing solutions for residents.