Homelessness and rental costs ‘pushing council to bankruptcy’

AN EAST London borough today warned it was hurtling towards bankruptcy over spiralling homelessness and private rental cost — as the Government announced the “largest housebuilding programme since the post-war period” was set to begin.

Newham town hall said it was facing “considerable financial pressures” because of its temporary accommodation bill for homeless families and without urgent support it “could face an unprecedented budget gap of £175 milliion” by 2026.

The council is forecasting a £40 million overspend in this financial year, on top of the £22 million in 2023, because of homelessness costs.

The borough is supporting around 6,500 families in temporary accommodation and has more than 38,000 households on its social housing waiting list.

In the 12 months to April it saw 6,685 homelessness applications — up 26 per cent on the previous year. The town hall blamed the “high reliance” on the private rented sector with a diminishing number of properties, a 35 per cent fall in council housing stock and benefits not keeping up with inflation.

Zulfiqar Ali, cabinet member for finance, warned that the borough may need to sell off assets and access the Government’s Exceptional Financial Support scheme, which enables them to borrowing to fund day-to-day costs.

It comes as the new Labour Government today promised a generation of new towns to “kickstart economic growth and get Britain building again”.

Deputy Prime Minister Angela Rayner yesterday announced sweeping changes to the planning system to tackle the housing crisis.

She said London’s housing had been at the centre of a “political game” under the previous government and the capital would be given the “realistic target” of building 80,000 new homes a year.

Mayor of Newham Rokhsana Fiaz welcomed the pledge but added: “After 14 years of soaring rents and housing insecurity in London, homelessness in Newham is increasing and costs of temporary accommodation are spiralling. We can’t simply build our way out of this housing crisis.”

After 14 years of soaring rents, we can’t simply build our way out of this housing crisis

Rokhsana Fiaz, Mayor of Newham