A recent Sheffield Council Housing report notes a ‘significant shortfall’  in central Government funding to support vulnerable people’s housing – with the Council having to make up the remainder.

A further report, which came before the Council’s Housing Policy committee on Thursday 14 September, highlighted the issue that arises from the way the Department for Work & Pensions (DWP) covers Housing Benefits.

The Department for Work & Pensions sets Housing Benefit policy and reimburses local authorities for paying Housing Benefits. However, due to the way central government calculates claimant’s accommodation, councils are often saddled with significant proportions of this cost, shifting the responsibility for paying to already squeezed local councils.

In 2022/23, the Council incurred a loss of £5.9m as a result of the legislation relating to temporary homelessness and supported accommodation. The Council is essentially bridging the gap between the amount the accommodation costs to procure and the amount we are able to recover via housing benefits. In 2023-24, this is forecast to cost the Council £4.9m for temporary accommodation and £3.5m for supported accommodation.

Labour’s Spokesperson for Housing, Councillor Nabeela Mowlana, said: “Housing is a fundamental necessity. At a time when 4000 people in Sheffield are presenting as homeless and there is a desperate need for an increase in housing provisions, it is shameful that the Government pursues their policy of an expenditure claim cap on Housing Benefits. This limits councils’ abilities to keep some of the most vulnerable members of our society off the streets by offering temporary and supported accommodation. We are experiencing a shortfall in funding, to support our communities, as a direct result of Conservative Government policy.”

“The Labour Party have committed to building a new generation of council housing, restoring social housing as the second biggest tenure and dramatically improving our ability to offer people safe, secure, warm homes. It is clear that we need a Labour government working with a Labour council to deliver for the people of Sheffield.”

An investigation in to supported housing by the National Audit Office (NAO) found local authorities experience increasing ‘shortfalls in their funding because of how the Housing Benefit system works’, and can experience a ‘gap in subsidy from DWP of 40% above rent officer determination for particular vulnerable groups.’

Nationally, the cost of this shortfall to councils across the country in 21/22 was estimated to cost £110m.

Councillor Alison Norris, who also serves on the Housing Committee, said: “This Tory Government consistently underfunds housing services, whether directly, through its austerity agenda, or indirectly by ensuring shortfalls in funding they have a legal responsibility to provide us.

“We need to get the Tories out and replace them with a Government that will properly fund public services and tackle homelessness at its source – by building the houses our communities so desperately need.”