Wandsworth Council is facing significant financial challenges in its housing sector, primarily due to rising homelessness costs and pressures on the Housing Revenue Account (HRA). The Housing Overview and Scrutiny Committee discussed the 2024/25 outturn report, revealing a General Fund overspend of £5.1 million, although this is an improvement from the £6.1 million overspend forecast at Q3.
The main driver behind the overspend is the council's statutory duty to prevent and relieve homelessness. Pressures within Housing Services have contributed significantly to the financial strain.
Several factors have contributed to the overspend, including:
- Increased demand for temporary accommodation: The number of households requiring temporary accommodation has exceeded budget assumptions.
- Rising unit costs: The cost of providing temporary accommodation has increased, particularly for larger family units.
- Enhanced homelessness prevention schemes: While intended to save money in the long term, these schemes have resulted in increased expenditure in the short term. The effectiveness of these schemes is measured using key performance indicators (KPIs). The Housing end-year 24-25 performance report includes the KPI WHR HS-005, which tracks the number of homeless cases prevented. In 2024/25, 436 cases were prevented, exceeding the target of 415.
The council is taking steps to address these financial pressures. A review of budget-setting assumptions has been conducted to take a more prudent approach to potential cost variances. The council is also working to source more Council units for larger families, which have a disproportionate effect on overall costs. This includes sourcing more Private Sector Leasing (PSL) units, which are generally cheaper than nightly paid accommodation and often used for families.
Despite the financial challenges, Wandsworth Council is committed to delivering its corporate plan actions, including the delivery of 1,000 new council homes and ending rough sleeping by 2030. Progress is being made on these actions, with 56 new homes completed in-year and plans in place to open a new rough sleeper hub in late summer 2025.
The new Rough Sleeper Hub will provide a trauma-informed, integrated service model. Each individual will be supported by a key worker who will coordinate their journey across multiple services, placing them at the centre of their own support plan. By locating a wide range of agencies within a single setting, the Hub aims to remove barriers to engagement and offer a holistic, person-centred pathway out of homelessness. Staff are funded through the 2022-25 Rough Sleeper Initiative programme. The government has extended this funding for 2025/26, with Wandsworth set to receive an additional £2.7 million in homelessness prevention grant.
The Housing Overview and Scrutiny Committee will continue to monitor the financial performance of the housing sector and work with officers to identify solutions to address the challenges faced. The annual review of housing resources and commitments will be presented to the Cabinet meeting in July 2025, providing a more comprehensive overview of the situation and the actions being taken to manage it.
