National Audit Office NAO

Homelessness Read full text in English

2016 report 11528 09/17 NAO
1 Incentives to take up employment
Risk of increasing the homelessness

Changes to Local Housing Allowance are likely to have contributed to the affordability of tenancies for those on benefits, and are an element of the increase in homelessness. Since 2011, the Department for Work&Pensions has introduced a series of welfare reforms, including capping and freezing Local Housing Allowance. These reforms have been designed to reduce overall welfare spending and to provide incentives for benefit recipients to take up employment. They have reduced the amount of household income that it is possible to derive from benefits where the Local Housing Allowance applies. At the same time, rents in the private rented sector in much of the country - London in particular - have increased faster than wage growth. All of these factors appear to have contributed to private rented properties becoming less affordable, which in turn is likely to be contributing to homelessness caused by the ending of an assured shorthold tenancy (In the Report: paragraphs 1.20 and 1.21).

2 Spendings increased to reduce the problem
Lack of full assessment of the impact

The government has not fully assessed the impact of its welfare reforms on homelessness. In our 2012 report Managing the impact of Housing Benefit reform, we found that the Department for Work&Pensions' assessment of the impact of its housing benefit reforms did not reflect their potential full scale, including an increase in homelessness. Subsequent research commissioned by the Department for Work&Pensions in 2012 on the impact of housing benefit reforms on homelessness did not establish how many of these households would have been homeless if the reforms had not been introduced. The Department for Work&Pensions has not carried out any more recent analysis, despite the introduction of a series of further welfare reforms since late 2012 (paragraphs 1.22 and 1.23).

3 Incomplete research on how the funds are used
Effectiveness of different uses not evaluated

The government has also not evaluated how local authorities are using the funding it has introduced to mitigate the potential impact of its welfare reforms. The Department for Work&Pensions increased the Discretionary Housing Payment (DHP) funding available to local authorities in Great Britain from L20 million in 2010-11 to L165 million in 2014-15. The increase was to provide some transitional support to households affected by welfare reforms. In 2015, the Department for Work&Pensions made a further L800 million available for this purpose. While the Department for Work &Pensions has commissioned research on how local authorities are using DHP, it has not evaluated the effectiveness of the different uses of this funding (paragraph 1.26).


This report examines whether the Department is achieving value for money in its administration of homelessness policy. To demonstrate value for money, the Department should show that it has understood the causes and costs of homelessness, that it is using this understanding to drive the effective use of its resources, and is leading government efforts to tackle homelessness effectively.

- Part One of this report sets out the causes and costs of homelessness;

- Part Two sets out the response of local government to homelessness; and

- Part Three sets out the Department’s leadership in reducing homelessness.

Homelessness policy is devolved and there are different legal definitions and government responses in Wales, Scotland, and Northern Ireland. This report examines homelessness in England only.


Homelessness in England in each of its various forms has increased in recent years. The number of rough sleepers stood at more than 4,000 in the autumn of 2016, having increased from fewer than 1,800 in the autumn of 2010. The number of homeless households in temporary accommodation has also increased, rising from fewer than 49,000 in March 2011 to around 77,000 in March 2017. The use of temporary accommodation is concentrated in London, and 70% of households in temporary accommodation are placed there by London boroughs.

The items above were selected and named by the e-Government Subgroup of the EUROSAI IT Working Group on the basis of publicly available report of the author Supreme Audit Institutions (SAI). In the same way, the Subgroup prepared the analytical assumptions and headings. All readers are encouraged to consult the original texts by the author SAIs (linked).