The Treasury’s homelessness budget still pays for failure after the crisis

Lígia Teixeira’s warning is the important part of the Treasury’s new homelessness budget: prevention must mean stopping homelessness, not giving crisis spending a more reassuring name.

The Treasury plans to introduce preventative departmental spending limits in the 2027 Spending Review, protecting programmes whose benefits may take years to emerge.¹ That could help ministers defend early intervention when immediate pressures are louder. It will not, by itself, create a home for a family already pushed into temporary accommodation.

English councils spent £4bn gross on homelessness services last year, while real-terms spending on those services rose by 165% between 2009-10 and 2024-25 as housing welfare and support fell by 74%.¹ That is the shape of an institutional failure: the state is spending more to manage homelessness while reducing some of the support that might prevent it.

Once a household qualifies for temporary accommodation, councils have a legal duty to find somewhere for it to stay, even while they try to prevent the next crisis.¹ The result is a system structurally tilted towards response. Councils cannot divert resources from accommodation they are legally obliged to provide into earlier intervention.¹

The Budget’s further £432m to help people off the streets is necessary, but it addresses homelessness after it has occurred.¹ Calling that prevention without distinguishing it from earlier intervention blurs the central question: whether government is stopping households from losing their homes in the first place.

The spending evidence is even clearer. Four of the five councils examined in a systems-wide evaluation spent most of their Homelessness Prevention Grant on temporary accommodation, while less than 1% of Rough Sleeping Initiative spending was classified as prevention under the evaluation’s narrower definition.¹ Councils are not choosing failure because they lack imagination; they are being forced to spend scarce resources on obligations that cannot wait.

The Treasury should publish what its protected budgets prevent, not merely what they fund. That means genuinely additional affordable homes, earlier help with rent arrears and benefits, and pooled responsibility across housing, welfare and health. England’s homelessness system will keep managing hardship after collapse until prevention has money that cannot be raided to pay for the consequences.