15 October 2019

Private companies have been accused of profiting from England’s deepening housing crisis after an Observer investigation found homeless families crammed into squalid hostels, crime-ridden tower blocks and rundown estates.

Freedom of information responses from councils in England’s top-50 homeless blackspots reveal that the 156 largest private providers of temporary accommodation collected more than £215m in the last financial year. On average these firms received £10,000 of public money for each booking.

A separate report, released on Sunday by the cross-party group London Councils, shows cash-strapped councils in the capital are facing a daily struggle to accommodate growing numbers of families and individuals entitled to additional support under flagship reforms designed to prevent homelessness. The research reveals government funding is not covering the full costs of implementing the Homelessness Reduction Act, which has left boroughs with a shortfall of more than £200m a year.

One in five of the largest private providers supplied homes in the last financial year that led to official “suitability reviews”, sparked by serious complaints about poor conditions, overcrowding or violence. The Observer spoke to families living in accommodation managed by some of the main players in the industry. It included: 

 Two hostels in Hackney, east London, where mothers and children complain they share cramped, bed-bug infested single rooms for years on end.

 A tower block in neighbouring Newham, where children sleep on broken beds and the heating is so expensive families say they huddle in the library downstairs to keep warm in winter.

 A rundown estate where a ceiling fell on a woman, who says she has often complained about leaks.

 A converted office block in Harlow, Essex, where families say they cower behind their doors while drug-users roam the corridors.

In London, which accounts for nearly 70% of all the families in temporary accommodation in England, almost one-third of the firms breached guideline rent levels, overcharging councils searching for emergency accommodation on 288 occasions over the last financial year. Five of these overchargers also negotiated additional financial incentives totalling nearly £500,000 from councils desperate to secure accommodation over the same period.

Some of the most successful business models are built on the worst types of emergency accommodation, such as B&Bs, where families can share bathrooms and cooking facilities with vulnerable adults, and self-contained studios, where whole families are sometimes housed. Previously unreleased data shows eight of the firms profited from 1,689 studio-flat bookings and nine profited from 2,359 B&B bookings in London last year.

The children’s commissioner, Anne Longfield, said it was completely unacceptable that homeless children were growing up in substandard temporary accommodation. “Some private companies are receiving enormous sums from councils yet providing cramped, low-quality temporary accommodation for homeless families,” she said.

Polly Neate, chief executive of Shelter, said: “These findings reveal a shocking picture of the appalling and degrading conditions many homeless families are forced to live in, which sound like something out of a Charles Dickens novel.” She said the firms were profiting from homelessness. “We need to ask serious questions about whether it is acceptable for private companies and individuals to profiteer from homelessness by charging struggling councils vast sums of money to deliver such poor housing,” she said.

Neate called on the government to invest in 3 million council homes over the next 20 years, thereby “preventing homelessness and circumventing the need for temporary accommodation”.

Darren Rodwell, housing executive member for London Councils, said local authorities were between a rock and a hard place. “More and more homeless Londoners are coming through our doors but there’s a severe shortage of accommodation available. And as homelessness rates continue to rise, private providers of temporary accommodation are able to keep demanding higher prices,” he said.

Councils were working together to agree price caps and reduce competition between boroughs, but he warned: “We will never be able to get a handle on the crisis until the government addresses the reasons why so many families and individuals are becoming homeless in the first place.”

Rodwell said the Homelessness Reduction Act had increased demand without giving councils enough resources to help people at risk of homelessness. “The situation is unsustainable and we urgently need increased investment in homelessness services,” he said.

The Ministry of Housing, Communities and Local Government said it was investing £1.2bn in tackling homelessness. “Everyone should have somewhere secure to live and it is completely unacceptable if standards are not being met. Councils have a duty to provide suitable temporary accommodation to those who need it,” a spokesman said.

Source: The Guardian