Agenda item

Report of the Director for Adults, Health and Communities. To be introduced by the Cabinet Member for Housing Services, Private Renters, and Planning.

Due to significant pressures in the private  sector housing market we have been unable to source enough accommodation as an alternative to homelessness, or for use as temporary accommodation. As a result the Council were now using hotel accommodation to meet statutory responsibilities to households experiencing homelessness. This report details the resulting financial pressures and the arrangements we have needed to enter into to meet this need.

The Cabinet Member for Housing Services, Private Renters and Planning introduced the report which sought approval for the Council to enter into arrangements with hotels to meet the pressure for providing emergency accommodation. The report also highlighted the additional spend incurred in order to meet these statutory requirements and provided information on the arrangements entered into. 

The Cabinet Member outlined the context that boroughs were reporting an increase in new temporary accommodation placements (up by 22%), a resulting increase in the number of households living in temporary accommodation and a 375% increase in the number of households living in B&B accommodation (1,674 families across London).

The reduction in availability of affordable private sector lets had affected the Council’s ability to move families who were facing homelessness to alternative settled accommodation rather than into temporary accommodation. Boroughs were attempting to find accommodation in a market that was broken and could no longer meet the housing needs of those who need accommodation most.

The Cabinet Member continued to outline that although the additional award of Homelessness Prevention Grant had allowed the Council to reduce the impact of the costs of B&B on the budget, this ad-hoc one-off payment did not reflect the scale of the challenge faced or provide any financial stability going forward. Local authorities needed the funding and the power to provide the good quality, affordable, and stable housing Londoner’s need.

In response to questions from Cllr Carlin, Cllr Brabazon and Cllr Connor, the following information was noted:

-      That some providers did provide communal kitchens which was not ideal but an alternative to takeaways being the only choice.

-      Agreed to provide Cllr Brabazon with a written response in relation to the mitigation actions being undertaken with registered social landlords to manage the number of households becoming homeless. It was noted that the Council did a lot of work with landlords by helping potential tenants provide a deposit.

-      The cost of housing a person in hotel accommodation was £14,400 per annum. The cost of housing a person in a Council hostel was funded through access to benefits and temporary accommodation funding.

Further to considering the exempt information at item 25 and agreeing the exempt recommendations,

RESOLVED

1.    To note the current pressures and reliance on the use of hotel accommodation to meet our statutory homelessness responsibilities, including the block-booked arrangements that we have entered into

2.    To approve the Recommendation contained in the Exempt part of this report.

3.    To authorise the use of the additional £2M of the recently awarded additional £2.1M Homelessness Prevention Grant to cover the increased budget pressures resulting from hotel use and supply pressures.

4.    To approve the establishment of a Hotelier Framework, and delegate authority to the Head of Procurement to appoint hoteliers onto the framework in accordance with the Public Contract Regulations 2015.

5.    To delegate authority to the Director of Adults, Health and Communities following consultation with the Lead Member for Housing Services, Private Renters and Planning, to award block contracts for hotel accommodation commissioned from the Hotelier Framework (referenced in 3.4 above), valued from £500,000 up to a maximum of £2m.

6.    To note the development of the B&B Elimination Plan, which has been submitted to DLUHC, which contains a range of actions aimed at reducing and then eliminating our use of hotel accommodation by the end of the year.

Reasons for decisions

It is a legal requirement to provide interim accommodation to households who approach us for homelessness assistance if we have reason to believe they are homeless, eligible for assistance and in priority need, and to provide temporary accommodation to households once we have accepted a housing duty until we can end that duty with an offer of settled accommodation.

Establishing a Hotelier Framework enables the Council to have a compliant flexible procurement process to draw down hotel accommodation when required with fixed rates.

Delegating the award of suppliers on the framework to the Head of Procurement enables the Council to establish the framework and commence using it at the earliest opportunity.

Establishing the Hotelier Framework does not in itself financially commit the Council to awarding contracts. The award of contracts for each individual placement will be in accordance with the Council’s Contract Standing Orders.

Delegating authority to the Director of Adults, Health and Communities following consultation with the Lead Member for Housing Services, Private Renters and Planning, to award contracts valued from £500,000 up to a maximum of £2m, allows the service to respond quickly in emergency/unforeseen situations, whereby the Council may need to secure large block booking arrangements. Hoteliers generally require upfront payments for bookings and therefore the Council needs to be able to respond swiftly to ensure the relevant accommodation can be secured in a timely manner.

The report seeks to highlight the use of hotel accommodation to meet this requirement, and the implications of this.

Alternative options considered.

The option of doing nothing is not feasible as it is unlawful to leave families who are owed a duty without accommodation.

A series of mitigating actions are planned to reduce the use of hotel accommodation throughout the year but at this stage we have a continued need to use hotel accommodation to meet our statutory responsibilities.

The impact on the general fund can be mitigated through the use of additional Homelessness Prevention Grant (£2.19M), which was recently awarded by DLUHC. However, the situation will need to be closely monitored as failure to deliver the actions in the B&B Elimination Plan will mean that the cost of the use of hotels will continue to rise and place additional financial pressure on the Council.