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Homelessness Reduction Act - New Burdens Funding

Briefing Paper

The Department for Communities & Local Government issued its guidance on new burdens funding for the Homelessness Reduction Act on 16th October 2017. This included information on the new burdens funding local authorities have been allocated to implement the Homelessness Reduction Act and consists of three documents:

  • New Burdens Funding
  • New Burdens Assessment
  • New Burdens Distribution – Methodology Notes

The government states that it is committed to preventing and reducing homelessness; and that is why they are implementing the most ambitious legislative reform in decades, the Homelessness Reduction Act, that will commence on 1st April 2018.

The government will provide £72.7million to local authorities to meet the new burdens costs associated with the additional duties contained within the Act over the course of the Spending Review. This is £11.7million more than had previously been estimated. The government anticipates that the new duties to prevent homelessness will lead to savings for local authorities thereafter.

The local authority allocations cover 2017/18, 2018/19 and 2019/20. The new burdens assessment explains how the government calculated the overall funding and the methodology note explains how the funding is distributed between local authorities.

At the same time the Department for Communities & Local Government published the draft Homelessness code of guidance for local authorities that is out for consultation until December 2017.

The Homelessness Reduction Act has been widely welcomed in the sector and the government has accepted that it places new burdens on local authorities that will require additional funding.

The government has now announced its proposals. An additional £72.7million is to be provided to councils over a three-year period based on the government’s assessment of the additional costs of the scheme nationally and on a formula to allocate it between authorities based on existing levels of expenditure and homelessness statistics. The largest share of the funding will be provided to London and £25.0million will be provided before the Homelessness Reduction Act comes into effect.

However, London Councils has calculated that the additional funding provided will only meet 39% of the expected additional costs. If their calculations are correct, most of the additional costs of the Homelessness Reduction Act will fall on local council tax payers.

This briefing paper summarises the government's proposals and the reaction to them  and provides some commentary.

To download YOUR copy, please click HERE

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