Tackling London’s homelessness crisis will require long-term funding and a renewed partnership commitment between central and local government, London Councils has declared.

Commenting on the government’s homelessness funding announcement – including plans for future changes to the Homelessness Prevention Grant – London Councils expressed relief that no local authorities will receive reduced funding for the next two years.

However, with boroughs warning that homelessness pressures are growing amid the cost-of-living crisis and chronic shortage of affordable housing, London Councils remains concerned that the capital stands to lose funding in future, noting that more resources and policy action will be required to tackle the issue.

The capital has the most severe homelessness crisis in the country, with London Councils’ latest analysis suggesting 162,000 homeless Londoners – including 78,000 children – will spend this Christmas in temporary accommodation.

With the government still planning to change Homelessness Prevention Grant arrangements from 2025, the cross-party group is calling for more long-term funding assurances for sustaining homelessness services. It is also seeking an immediate increase in welfare support for households in the private rented sector struggling to meet their housing costs, as this will help thousands of Londoners avoid homelessness.

Cllr Darren Rodwell, London Councils’ Executive Member for Regeneration, Housing & Planning, said:

“The grim reality is that far too many Londoners will be homeless this Christmas and borough homelessness services will be under massive pressure for the foreseeable future.

“We’re pleased the government has listened to our concerns and will ensure no council receives reduced homelessness funding for the next two years.

“But there’s still so much more that needs to be done if we’re to reduce homelessness and achieve our shared vision of ending homelessness altogether. Long-term funding assurances and the closest possible partnership between central and local government is crucial. We’ll continue to work with ministers and seek faster progress on this challenge in 2023.”

Boroughs had previously warned that government reforms to the Homelessness Prevention Grant, the main source of funding for councils’ work to prevent and tackle homelessness, could see London lose almost a third of its funding.

While committed to working with the government on ensuring the Homelessness Prevention Grant works as effectively as possible in targeting resources, London Councils would also support a more fundamental review of homelessness funding – including the role played by welfare policy – ahead of the next Spending Review.