Shropshire Council is to spend £1.5 million on houses for homeless people to reduce its increasing and costly reliance on B&Bs.
There are currently over 70 households staying in B&Bs due to a shortage of temporary accommodation options in the county.
The council says the cost for 70 people to stay in B&Bs for a year is over £1.3 million, of which it has to pay £941,000 after reclaiming a portion from the government.
The authority has now proposed working with housing associations to increase the number of properties available for use as temporary accommodation. Agreements could also be struck with private landlords whereby the council would guarantee the rent and have nomination rights over the properties.
A report by Andy Begley, director of housing and acting interim chief executive, proposes the council also looks at purchasing its own homes up to a maximum of £1.5 million.
This model, the report says, will reduce annual costs to £419,000, based on 70 households, of which a higher proportion can be reclaimed from the government, leaving the council with a final bill of £116,000.
It is also hoped that temporary housing placements will improve prospects for homeless people to secure permanent homes.
Mr Begley’s report says: “The council is short of temporary accommodation options and is having to utilise B&B placements across the county.
“This is wholly unsuitable for households who have been placed in such accommodation as well as financially costly to the council.
“The number of households presenting as homeless and therefore requiring accommodation is increasing year on year meaning an alternative option is needed urgently.”
Mr Begley says the Covid-19 pandemic has seen an increase of 156 per cent in the number of households presenting as homeless and an increase in B&B placements of 150 per cent.
This figure is expected to rise further when the government’s temporary ban on evictions is lifted.
The report says: “Most of the placements are single households who will struggle to move on due to a lack of one-bed properties in the county.
“Both homeless today and triage cases have been steadily increasing throughout the pandemic and are not showing any signs of lessening.
“This is all whilst evictions are on hold, meaning an increase in families presenting in September 2020 is highly likely due to an increase in rent arrears following a loss of job and reliance on benefits.
“Sadly, the social isolation and lack of support networks caused by placements in B&Bs can often damage the chances of a successful stay and the opportunity to demonstrate to future landlords that a tenancy is possible.
“This often means a client is not deemed to be tenant ready and therefore skipped for a permanent offer, leaving them to remain in B&B which is a costly expense for the council.
“As some B&B placements are out of county this results in increased support worker costs with longer travel times and also limits the time available to support and assist in accessing other more permanent forms of housing.”
It is proposed that the £1.5 million – plus stamp duty and VAT – should come from money paid by housing developers under ‘section 106’ agreements.
The report will be discussed a meeting of the full council next Thursday, July 16.