Temporary Accommodation Debts Piling Up For Councils

2nd December 2021

A new report, "Charges for temporary homeless accommodation in Scotland - law and reality" has been published by the Legal Services Agency which examines the practice of charging for temporary homeless accommodation in Scotland, and whether local authorities are acting lawfully in this area.

Background
Individuals in Scotland who make a homelessness application to their local authority are supposed to be provided with temporary accommodation.

However, the provision of temporary accommodation is costly for local authorities. The Housing (Scotland) Act 1987 allows local authorities to make "reasonable" charges for temporary accommodation. The accompanying statutory Code of Guidance on Homelessness requires that individual circumstances must be taken into account when setting the charges.

The report explains that individual circumstances should be taken into account to ensure that any charges are affordable. The practice by local authorities of failing to consider individual circumstances may be unlawful.

Legal Services Agency submitted freedom of information requests to all local authorities in Scotland for information on their charging regimes.

Findings of the report
The report found that the charging practices vary across Scotland, resulting in a ‘postcode lottery' for individuals.

Most local authorities do not currently take individual circumstances into account but do consider affordability when setting their charges.

The report found that the total debt owed by individuals to local authorities for these charges totalled upwards of £33.3 million.

The practical implications of the current system are that charges are unaffordable, leaving many people with high levels of personal debt, leading to considerable hardship for individuals who find themselves in this situation, as well as contributing to mental health issues.

Recommendations
The report recommends that in the short-term, local authorities should review and update their policies on charging for temporary accommodations to ensure that they are in line with the Code of Guidance on Homelessness and the human right to adequate housing. In circumstances where individuals may have been subject to unaffordable charges for temporary accommodation, housing advisers are advised to challenge such charges with legal action where necessary.

In the long-term, the report recommends that charges for temporary accommodation should be removed altogether. Failing that, tighter regulation for temporary accommodation charges are recommended, with the addition of such mechanisms as affordability assessments to ensure that all charges are affordable.

Highland Council Position
Temporary accommodation is a combination of Council owned units, rented housing association properties and units rented from private landlords. The rent for Council properties is the Council rent for the size and type of property, while the rent for other types of properties is based on "the full cost recovery of the charge levied" by the landlord or housing association. For ad hoc B&B accommodation, the Area Housing Manager and Housing & Homeless Service Manager decide on a reasonable charge based on "the length of the stay and the affordability of the charge. The Local Housing Allowance rates will be used as a guide."

In its FOI response, the Council said that it tries to keep rents "as affordable as possible" and that "officers are encouraged to discuss affordability with homeless clients."

The Council's policy includes a differentiated approach to tenants entitled to full Housing Benefit and those who are not. For tenants entitled to partial or no Housing Benefit, tenants pay up to the Local Housing Allowance plus a service charge, with the any difference between the LHA and the actual rent being remitted.

During the 2019/20 financial year, 1399 households were placed in temporary accommodation. Of 585 live tenancies at 29 March 2020, 221 households were not in receipt of Housing Benefit. The Council received £3,711,693 in income from charges and was owed a total of £4,417,123.

Edinburgh City Council Had The Highest Debts
When asked about affordability for the individual, the Council gave the following explanation about temporary accommodation charges: "The Council assists people to apply for Housing Benefit (HB) when they access Temporary Accommodation (TA). If in receipt of full benefits that covers costs; if someone is working, the amount of service user contribution, and, how much HB is received, is determined by an individual's circumstances."

From 1 January to 6 December 2020, 4,855 households stayed in temporary accommodation for at least one night. Of these, 1701 people made a payment contribution towards their stay, although data provided by the Council suggests that a total of 2,248 were liable to make a direct payment. For the same period, the Council received £22,997,570 from Housing Benefit and £2,384,739 from direct charges. Arrears arising from that period amounted to £12,711,641. The cost of providing the accommodation was £38,093,950.76l.

Read the report HERE
Charges for temporary homeless accommodation in Scotland - law and reality - Pdf 23 Pages