How the housing crisis is driving up council tax across England

Patricia has been living in a hotel for eight months. She says she’s had enough and just wants a permanent home.

“I so want my own key, I am fed up with being here,” she says.

Patricia says hotel rules mean no guests are allowed and she has to share a kitchen with the many other families that have been placed there.

The cost of housing people in temporary accommodation such as hotels like the one Patricia is living in has been described as “unsustainable” by London Councils.

The organisation which represents the 32 boroughs in the capital has revealed they overspent by £330m last year.

In the London borough of Newham there are around 7,000 school children living in temporary accommodation.

The council’s hotel bill has tripled in the past year. From today, Newham council has put its council tax up by 9% saying it’s “entirely down to the growing costs to stop people being on the streets”.

We have analysed the council’s public spending data and discovered it’s spent at least £30m on hotels in the past year.

In London there is on average at least one homeless child in every classroom.

Temporary accommodation can be a number of types of housing that’s not a permanent residence and the numbers in need have reached a record high.

Deputy chair of London Councils Grace Williams says “temporary accommodation is probably the largest pressure boroughs are seeing on their finances”.

“We have no other option but to put up council tax,” she adds.

She says councils are working hard to find alternatives for families.

“We really need more investment in home building and an awareness from government of the temporary accommodation crisis so that we can start to bring those costs down.”

Last year the District Councils’ Network said councils were spending most of the council tax they received on temporary housing, with Crawley, Hastings and Dartford spending more than 50% of council tax receipts on it.

It is also expecting spending to increase by a third this year.

Trafford Council in Greater Manchester is also raising council tax by 7.5% citing rising homelessness as a factor.

Teaching assistant, Julie, who lives in a semi-detached house in Trafford said the rise will be £220 a year for her.

“Everything else is going up and it’s getting tighter and tighter,” she said. “I don’t know how the pensioners will cope.”

Julie says she understands that councils need to house families but says they should “have a look at housing people in all of the empty properties” to save some cash.

Both Newham and Trafford are among six councils which have been allowed to bypass the normal 5% cap on increases.

We looked at Trafford Council’s spending data and found it’s spending more than £3m on temporary accommodation, with a large portion of that on local hotels and B&Bs.

Trafford Council said: “We have gone from five households in B&B accommodation in April 2020 to 121.

“We have prevented 1,618 households from becoming homeless in that time thanks to our work with people at risk of homelessness.”

But some people believe councils should be using temporary accommodation with proper facilities rather than paying for unsuitable hotel rooms.

Dr Laura Neilson’s organisation Shared Health works with homeless families.

She said: “The rhetoric from councils is that they have no control but with this much money being spent, there’s got to be a safer, more sustainable, more sensible solution.”

Some families are living for long periods in hotels without kitchen facilities or are sharing bathrooms with strangers in House in Multiple Occupancy (HMO) properties.

Sometimes children are placed miles away from schools.

I have visited countless families in unsuitable emergency accommodation.

Last week I stayed in a hotel where one English council had paid more than £200,000 to place households there in the past six months. It was grotty and a foul damp smell hit me in the face and did not go when I opened the windows.

Earlier this year, a Public Accounts Committee (PAC) report said it was “alarmed” that as of June 2024, there were 4,000 families with children housed in B&Bs for longer than the statutory six-week limit.

“Children are growing up in places where there isn’t room to play or to study or develop well, said Williams.

“So it’s absolutely crucial we get this issue sorted.”

The PAC report said there were 123,000 households in England in temporary accommodation.

A lack of affordable homes, rents rising faster than household benefit levels and evictions have contributed to homelessness at the highest levels since records began.

Local authorities are obliged to help families that become homeless and the cost of doing so was £2.1bn last year. Up by £500m on the previous year.

London Councils said authorities in the capital were spending £4m a day on emergency accommodation in 2023-24.

In Newham, one in 20 households are in temporary accommodation. And the council predicts that it could spend more than £40m on temporary accommodation this year.

Newham council has been asked for comment.

Another east London council, Havering, has also overspent by £6m on housing homeless families and is putting its council tax up by 5%.

Council leader Ray Morgon from the Havering Residents Association party says libraries have had to close because of spiralling costs.

He also says hotels are pushing up prices as “they know that there is a rapidly increasing demand and limited supply”, which he says, “enables them to push their prices up and we are spending a huge amount of money on those kind of hotel bills”.

UK Hospitality said accommodation costs to councils are set at market rates.

Morgon says he hopes a new way of housing some will decrease spending in the long term.

Havering council is planning to install 18 modular homes to be used as temporary accommodation, while it builds new homes on the same site.

While Morgon admits it’s a drop in the ocean compared to the numbers of families in need, he says “it’s a start”.

He believes it will save the authority around £500,000 a year.

The factory-built homes last around 60 years, and while build costs are still high, the council says the benefit is that they can be built quickly and used instead of hotels and can be moved around.

A Ministry of Housing, Communities and Local Government (MCHLG) spokesperson said: “We’re providing the largest-ever cash boost in homeless prevention services, delivering the biggest boost in social and affordable housing to tackle the root causes of homelessness, and making £69bn available to council budgets across England.”

Whether modular, or brick, nobody seems to disagree that we need more homes.

Last week the Office of Budget Responsibility said the government was unlikely to meet its target to build 1.5 million homes.

That may be bad news for all of us – taxpayers, renters, young people and most of all the children sleeping in a bed that’s not their own tonight.

Additional reporting by Daniel Wainwright and Tara Mewawalla