Agenda item

Homelessness Prevention Grant to cover increased budget pressures resulting from the need to use hotels to provide accommodation due to the shortage of alternative accommodation.

Due to the ongoing shortage of alternative accommodation, Housing Demand Services has been forced to extend the use of hotels beyond the originally anticipated period of 31 December 2023.

As a result, there had been an additional overspend of £1.6 million on the Housing Demand Budget, with £1,009,515 specifically attributed to hotel costs incurred between January 2024 and March 2024.

The Housing Demand MTFS growth of £2.9 million in 24/25 assumes no continued use of hotels (bed and breakfast). However, the lack of alternative supply continues to be a challenge and so we have entered the new financial year with households still living in hotels. The Council forecast that this would result in a need to extend the use of hotel cost of £1,511,990 for the period April 2024 to July 2024.

The Housing Demand and Strategic Procurement teams are working together to create a hotelier framework. Initially, it was projected to be completed by March 31, 2024. However, due to resource constraints, the expected completion date is now July 2024.

The Cabinet Member RESOLVED

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

2. To note the additional overspend of £1.6m in the 2023/24 Housing Demand budget and the continued risk to the 2024/25 budget position.

3. To note the correction of the error within the previous Cabinet report dated October 2023 as set out in the exempt part of this report where the incorrect value was attached to the hotels. 

4. To agree the extension of the current contracts to include additional spend given the continued use of hotels and the delay in the delivery of the Hotel framework, as detailed in the exempt report.

5. To note that the delay in the procurement of the Hotel Framework and the revised delivery date.

Reasons for decision

To correct the error within the previous Cabinet report dated October 2023 where the incorrect value was attached to the hotels and to approve the contract extensions to ensure compliance with regulations.

It was a legal requirement to provide interim accommodation to households who approach the Council for homelessness assistance if the Council had reason to believe they were homeless, eligible for assistance and in priority need, and to provide temporary accommodation to households once the Council had accepted a housing duty.

The continued shortage of supply had meant that the Council was unable to source enough self-contained accommodation and has thus needed to continue using hotels to meet its statutory duties.

Alternative options considered

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

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