The UK spends millions on services for homeless people. Housing them could make more economic sense

The government’s recently announced grand plan to end homelessness in England is the latest instalment in a long line of promises (and failures) by governments across the UK. This latest strategy, published in December, promises billions in investment in rough sleeping services, alongside a previous commitment to build 1.5 million new homes by the end of this parliament.

It’s an attempt to address the UK’s acute housing crisis. On the surface, there is plenty to praise in the plan, and these proposals are already receiving support from the wider sector.

For example, the scrapping of the two-child benefit limit will lift many vulnerable children out of poverty. And the strategy hints at more preventative approaches to the problem of homelessness.

But there’s a problem. Can the government achieve this objective within the narrow political window that this parliament offers? If not, perhaps it should consider whether this is the most effective use of public money.

One striking omission in the strategy is the absence of a commitment to the “housing first” model which, as the name suggests, would provide immediate access to housing for a homeless person. This omission is surprising, given the report’s repeated emphasis on housing as a solution.

Housing first combines an unconditional home with range of wraparound services for things like mental health problems or addiction. It’s distinct in being a genuinely long-term housing intervention, catering to those with multiple and complex needs. It is one of the most robustly evidenced homelessness interventions.

There are some isolated case studies of housing first mentioned in the report, but responsibility once again falls to the third sector. Charitable organisations are already forced to compete for insufficent funding pots, while also working alongside cash-strapped local authorities.

The average cost of housing first support per person is highly economical, according to the government’s own cost-and-benefit analysis data. The expected benefits to society have been calculated at £15,880 per person, which is more than double the £7,737 average cost.

According to a recent report from the charity Crisis evaluating housing first trials, a national roll out would cost £226 million per year. But this would be offset by reductions in provision burdens, equivalent to £280 million per year. This equates to total cost of £17,068 per individual per year, with a related saving surplus of £3,313.

The false economy of ‘business as usual’

Moral and human costs aside, homelessness is astoundingly expensive. Temporary accommodation alone costs billions each year. Although exact data on this is sparse, people experiencing rough sleeping are often referred to as “frequent flyers” through public services such as A&E departments, police and the courts.

The most recent calculation from Crisis, which goes back to 2015, estimated the annual cost of rough sleeping to be around £20,000 per person (or £27,872 when adjusted for inflation). This is due to things like use of NHS services, policing and the courts system. As seen with the government’s own rough sleeping snapshot, it continues to rise in the UK.

Arguably, business as usual isn’t working. There is little point in diverting funding to services that don’t work, or funding housing programmes for people with complex needs who may not be ready for a tenancy. If the aim is to reduce or end homelessness sustainably, the answer is not more short-term funding, but significant structural reform.

In my research with my colleague, Joanne Massey, we explored some of these wider structural constraints facing people in poverty. We framed these constraints as forms of intentional and unintentional harms by the state. They include a welfare system where, despite annual rises, the range of benefits remains out of touch with living costs, alongside things like universal credit sanctions that make already difficult lives even more challenging.

Without confronting these, homelessness cannot be prevented or reduced. As such, the report falls short. For this to be a pragmatic and cost-effective strategy, the system must change from one of economically wasteful short-termism. There is no shortage of impactful and evidence-based examples – including housing first.

However, merely increasing funding will not achieve the necessary changes. The government must also commit to a public health approach. This means prioritising prevention through early intervention, as well as tackling the causes of homelessness at their structural root. Homelessness is a problem for all of society to address.

And merely listing poverty as a cause of homelessness does nothing to address it permanently, nor replace what has been lost from hundreds of billions of pounds of cuts to public services. A public health approach to homelessness would address challenges like these at the individual, community and societal levels simultaneously. It would also be a better use of taxpayer funds.

As an example, efforts in Wales to improve health with a prevention strategy produced a £14 return for every £1 invested using a public health approach. There was an annual saving of £9,266 per person when using preventative homelessness programmes. This approach combines the third sector, council services, education, health and the criminal justice system into one coherent strategy.

The government’s homelessness strategy is a positive start, but it will not replace what has been lost. Nor, as it stands, will it address the complex reasons why homelessness persists.

Anton Roberts does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.