Homeless people living in hostels and supported homes in England are at risk of being forced back on to the streets as providers prepare to close beds and services in the face of soaring costs, charities have said.
They say catastrophic rises in energy bills coupled with underfunded council contracts threaten the viability of hundreds of homelessness charities and could derail the government’s promise to end rough sleeping by 2024.
A fifth of homeless charities have already reduced services in response to cost of living pressures, while nearly half say their frontline services will be at risk over the next few months, according to a survey by Homeless Link, which represents homelessness providers.
One charity told the Guardian it had received estimates suggesting its combined annual gas and electricity bill would rise by £500,000 from May. As well as potentially ruinous increases in energy bills, providers say their viability is threatened by councils refusing or being unable to increase funding in line with costs.
Homeless Link’s chief executive, Rick Henderson, said the survey findings suggested there could be a surge in the number of people sleeping rough, and he urged the government to ensure funding for homelessness services rises in line with inflation and providers continue to receive support with energy bills.
He said: “Due to local government funding pressures, the vast majority of homelessness services are having to scrape by on budgets set when inflation was a fraction of what it is now. Meanwhile, providing accommodation is energy intensive, with services unable to pass on the cost of higher energy bills to people they support.
“The government made a commitment to end rough sleeping in England by 2024. But inaction now will lead to hundreds of vital services across the country shutting down, leaving the people they support with nowhere to turn but sleeping rough or other types of homelessness like sofa surfing or being placed in expensive emergency accommodation.
“These aren’t just statistics but real people, forced backwards to return to homelessness, affecting their physical and mental health.”
Homelessness services in England currently operate about 32,000 beds across every council area, as well a range of specialist services including drug and alcohol addiction support, mental health help, employment and skills training, and refuge provision.
Despite a 141% increase in rough sleeping over the past decade, the homelessness sector has contracted significantly, with 26% fewer beds in England since 2010, according to Homeless Link. There has also been a fall in the number of day centres providing food, warmth and support for homeless people.
Amanda Dubarry, the chief executive of Your Place, a charity based in Newham, east London, which runs one of the biggest homeless hostels in England, said financial pressures meant it was now looking at whether it needed to pull out of delivering key services and reducing the number of homeless people it could support.
It had received a quote for annual energy costs from May of £620,000, up from £124,000 in the current year under a fixed rate agreed two years ago. “Without government help, we just have to cross our fingers and hope wholesale energy prices come down,” she said.
The charity also faces pressure to meet rising wage costs, while many of its tenants would struggle to pay a nominal service charge that goes towards the hostel’s energy costs if it was increased. “I really worry about the impact of this winter. Services are already struggling to meet the needs [of homeless people]. We are heading for an implosion of some sort,” Dubarry said.
Derek Heath, the chief executive of Druglink, a homelessness charity that rents 75 specialist properties for vulnerable adults across Hertfordshire and Bedfordshire, said it had pulled out of a three-bed home for female ex-offenders because it was no longer affordable, “the first time we have ever had to give back a property for monetary reasons”.
Changing Lives, a large homeless provider charity based predominantly in the north-east of England, said it was reviewing its contracts with local authorities “line by line” to assess their viability, and it was unsure whether it would continue to deliver some services.
“We are seeing more people coming into our services facing destitution and with nowhere else to turn, and others who are unable to move on from our services because they simply cannot afford to,” said the charity’s chief executive, Stephen Bell.
The Homeless Link survey was carried out between September and November 2022 and 356 of its 900 members responded.
The Department for Levelling Up, Housing and Communities said: “We are committed to ending rough sleeping and are spending £2bn over the next three years to tackle rough sleeping and homelessness. This includes £500m to councils across England for a range of services including outreach services and accommodation.
“Homelessness services will receive a discount on high energy bills until 31 March 2024, providing them with reassurance against the risk of prices rising again.”
• This article was amended on 30 January 2023 to clarify that many Your Place tenants would struggle to pay a nominal service charge if it was increased; an earlier version indicated that they were struggling to pay it at the moment.
