Tower Hamlets Council's Audit Committee has debated significant concerns regarding the risk of homelessness and the escalating costs associated with temporary accommodation.
During a meeting on Thursday, 12 March 2026, councillors expressed alarm over the impact of budgetary risks on homeless households, particularly children, and the perceived lack of focus on safeguarding aspects within the council's risk register. The committee reviewed an updated corporate risk register which lists 13 corporate risks, with one having been escalated and one relegated, both relating to the housing regeneration directorate.
The discussion highlighted that while the council has a lower risk appetite for safeguarding risks, a higher appetite exists for change and transformation. Financial risks, for instance, are to be managed to a cautious
level. The council's definition of a 'cautious' level for managing financial risks is that they should be managed to ensure that we are bringing the target score level down to what we call a cautious level which is a tolerance score of 10 to 12 in our risk scoring.
This means that financial risks are to be managed to a target risk score level of 10 to 12.
Councillor Marc Francis raised the issue of homelessness and the cost of temporary accommodation, noting that while the report focuses on budgetary risks, these budgetary risks themselves create risks for homeless households placed in temporary accommodation. He expressed concern about disrepair issues and physical problems within some temporary accommodation, and the pressure on the service due to increased numbers of homeless households.
The increased cost of temporary accommodation in Tower Hamlets is attributed to the demand from homeless residents and the increased cost of accommodation due to the shrinking lower end of the private rented sector market as a result of the forthcoming introduction of the Renters Reform Bill.
This leads to difficulties in providing emergency accommodation for vulnerable children and adults, impacting available budgets with an annual spend of approximately £64.7 million (gross) on temporary accommodation. This produces financial, reputational, and legislative risks. The risk is rated as 'Severe' with an 'Impact' of 4 and 'Likelihood' of 4, resulting in a current risk rating of 16. The target risk rating is 'Material' with an 'Impact' of 3 and 'Likelihood' of 3, resulting in a target risk rating of 9.
Control measures in place include: weekly monitoring of arrears and volume of cases without Housing Benefit; implementation of new processes to ensure rent accounts are set up in a timely manner and Housing Benefit claims are secured at sign-on; review and business case to increase capacity to chase former tenant arrears; and dedication of appropriate Housing Benefit processing capacity to prioritise the processing of temporary accommodation claims. The control measure 'Review all temporary accommodation nightly paid rates to reduce by £5' has achieved a 100% completion rate and has resulted in significant savings. The control measure 'Utilising all available and feasible council accommodation as TA' is 35% complete with a target date of 31/03/2027. The control measure 'Increasing all TA rents to current LHA' has achieved 100% completion and has resulted in a significant uplift in income. The control measure 'To ensure existing quota of 35% of all lets pa are allocated to homeless households in costly TA' is 75% complete with a target date of 30/06/2026. The control measure 'To ensure that all temporary accommodation placements are evidenced/meet the legal threshold within the Homeless Reduction Act' is in progress with a target date of 26/04/2026. The control measure 'To ensure that homeless prevention activities are maximised to address the main causes of homelessness' is in progress with a target date of 26/04/2026.
Concerns were also raised about the potential for government intervention, with the possibility of envoys being replaced by commissioners. An update was requested on the ministerial statement regarding the council and the potential appointment of a financial envoy.
The committee agreed to note the report, incorporating suggestions made regarding the homelessness risk and the management of cross-directorate risks. The urgency of the issue was underscored, with a suggestion to move a deep dive into housing options, including homelessness, up the schedule.
For more details on the agenda and supplementary items, please refer to the Agenda frontsheet, Supplementary Agenda - Items 4.14.2 and 4.3, Supplementary Agenda - Item 3.1 and Item 4.6, and Supplementary Agenda - Item 4.5 Work Plan.
