The government has refused to say why Havering's homelessness funding faces a real-terms cut, despite "unprecedented" demand caused by the cost-of-living crisis.

The council said the current funding level was “not sufficient" and has admitted it is encountering “unprecedented” homelessness applications amid the cost-of-living crisis. 

We revealed last week that Havering’s monthly spend on emergency hotel and B&B accommodation had rocketed by almost 400 per cent in two years. 


Despite this, the borough’s Homelessness Prevention Grant (HPG) is facing a real-terms cut, the Department of Levelling Up, Housing and Communities (DLUHC) has revealed. 

In 2023/4, the grant will be £2,461,272. Whilst that is an on-paper rise from this year’s £2,373,119, the Bank of England inflation calculator says it is actually a 4pc real-terms cut – and counting.

“The 2023/4 grant has increased slightly, but represents a real-term cut when inflation is taken into account, which is not sufficient to meet the increasing need,” said Paul McGeary, Labour cabinet member for housing. 

He urged Westminster to up the grant and to increase Havering’s Local Housing Allowance (LHA) - a government cap on how much the council can spend on rent for homeless households. 

The average rent for a three-bedroom family home in Havering is between £1,500 and £1,600 per month, but the LHA is £1,375 – so the council ends up paying almost £3,000 a month to put families up in budget hotel rooms instead. 


Conservative councillor David Taylor, who had publicly urged government not to cut HPGs, said he was “pleased” the sum had increased. 

“Whilst this is below inflation, which is running at unusually high levels, it will have a positive impact,” he said. 

But he echoed Cllr McGeary’s call, saying: “I’d ask that the government carries out an urgent review into the LHA.” 

We asked the DLUHC whether it would review the LHA, but it did not answer. 

It also would not say why it had imposed a real-terms cut on Havering’s homelessness funding. 

It said: “Havering Council has up to £198m available for this financial year so it can continue to deliver vital services for its residents. 

“We have also provided more than £2m as part of the HPG to prevent evictions and ensure families in Havering are not left without a roof over their heads.” 

We asked the DLUHC: “What is the department’s message to families living in budget hotel rooms because Havering Council’s LHA will not cover Havering rents?” 

It did not answer.