Council funding: Leaders warn of the end of local government

The rising cost of homelessness could lead to effective bankruptcy and "the end of local government", councils have warned.

About 50 council leaders gathered at a summit in Westminster earlier chaired by Eastbourne Borough Council (EBC).

Speaking at the emergency meeting, EBC leader Stephen Holt said the government must prevent "a national crisis".

The government said it recognised councils were "facing challenges" and had announced £64bn worth of funding.

Liberal Democrat councillor Mr Holt said EBC was projected to spend nearly £5m on temporary accommodation this financial year, compared to £1.4m five years ago.

He said this meant that for every £1 that is collected in council tax, 49p went on temporary accommodation.

Mr Holt said: "Simply put, without government intervention to tackle the tremendous cost of temporary accommodation and homelessness, the next step for many councils of all stripes is emergency budgets and section 114 notices," meaning effective bankruptcy.

He said this was not a political issue and called on the government to increase the housing benefit subsidy cap for temporary accommodation placements.

Michael Jones, Labour leader of Crawley Borough Council, said costs and homelessness were "accelerating".

He told the meeting: "I don't think it is over-dramatic given the pressures facing councils to tell the government that they are presiding over the end of local government if they fail to take the urgent action needed."

Councillor Emma Taylor-Beal, cabinet member for housing and citizen services at Worthing Borough Council, said budgets were "taking a real physical and mental toll" on councillors.

"It's hard to retain staff and staff sickness has increased as a result of the stress they're under," she added.

In a statement, a spokesperson from the Department for Levelling Up, Housing and Communities said: "We recognise councils are facing challenges and that is why we have announced a £64bn funding package... to ensure they can continue making a difference..."

They said the government was committed to reducing the need for temporary accommodation by "preventing homelessness before it occurs" and was providing councils with £1bn through the Homelessness Prevention Grant over three years.

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