Yahoo News Newham Council warns of 'impossible problem' as it goes £25m over its temporary accommodation budget
An East London council predicted to go over its temporary accommodation budget by £25million says the situation could worsen and turn into an 'impossible problem' if costs continue to spiral. During a meeting on Tuesday (April 23), Newham councillors sitting on the overview and scrutiny committee were left 'alarmed' by the rising costs and the burden this could have on the council.
The council has previously said it's at the 'front line' of the housing crisis and is having to fork out on nightly paid accommodation which is costing around £90 each night per household. Altogether Newham had 6,443 homeless households living in temporary accommodation at the end of February 2024, with 3,461 of those households in nightly paid accommodation.
During Tuesday's meeting, scrutiny chair Anthony McAlmont began by saying he found the £25m overspend 'alarming'. Cllr McAlmont said: "For me the figures are alarming... I am surprised and alarmed that the council does not seem to be able to get the projections right.
"Every quarter we are getting a new set of figures and what is worse is the figures are not projecting downwards, which would be a welcoming position, they are projecting upwards." Zulfiqar Ali, cabinet member for finance and resources, said it was clear that housing and temporary accommodation was having the 'biggest impact' on the council's finances.
Cllr Ali said: "I know you said obviously it is our problem, clearly it is our problem, but housing is a national policy failure and this is happening across the country. You've seen in the [council] report that other [local] authorities are having similar problems, we're not alone in it but I agree that this is our problem and we need to resolve it effectively."
Cllr Ali said the council departments for finance and resources will be coming back to the committee to present a new set of proposals to tackle the temporary accommodation black hole. He added: "...clearly this isn't a mismanagement of the council's financial resources, it is a situation which is national and I agree we need to manage that."
Cllr Terry Paul, a member of the overview and scrutiny committee, followed by asking: "What has gone wrong? Being where you are now, what would you have done differently over the past year?" Cllr Ali responded, and said: "The situation we reported at the time was accurate... but clearly things have changed, it's very difficult to stop people coming to the door.
"You've seen the number [of households in temporary accommodation], how they've changed and similarly with children in care." Cllr Paul then asked the latter question again, and said: "Whatever you have done in your transformation plans have not worked, the spending control for mitigation has been imposed for four years now but obviously have not worked."
Cllr Paul added: "So what would you do differently and, as we go forward, when will you level with the residents about some of the physical decisions you're going to have to take very soon?" Cllr Ali responded and said he didn't believe there was much more the council could have done or foreseen to fix the spiralling costs in temporary accommodation.
Cllr McAlmont said: "We at scrutiny recognise the temporary accommodation problem is not yours [the council's executive]...our concern though is the money - we don't have the money." Council officers previously said Newham is experiencing 'acute' housing pressures and for the past two years has seen a sharp increase in the number of households becoming homeless. They said the council is using commercial hotels as a 'last resort' and have instead been putting families in self-contained accommodation, however this has also proven costly due to the increasing number of households in temporary accommodation.
Conrad Hall, corporate director of resources at the council, warned if the cost of the temporary accommodation budget continued to rise, it could become an 'impossible problem' for the council. He said: "If temporary accommodation pressures continue at this rate, if we continue to see price increases and volume increases at the rate they have been going, then that will start to pose an impossible problem for the council.
"It will take a national housing policy to deal with the housing pressures that all local authorities around London and the South East [are facing]; that does not take away our responsibility to mitigate it as best we can." Newham mayor, Rokhsana Fiaz, said the council could not have anticipated the spending pressures on temporary accommodation but said measures had been put in place early on to try and avoid any overspending.
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