Tackling Homelessness and Rough Sleeping: 2025-26 Funding

We are facing a homelessness crisis across the country, with unprecedented levels of homelessness and a sharp increase in rough sleeping. There are a record 123,100 households living in temporary accommodation, including 159,380 children. The number of people sleeping rough on our streets is rising with almost 4,000 people sleeping rough on a single night in 2023. This did not happen overnight; it is the result of 14 years of neglect. This is the legacy this Government have inherited, and I am determined to address these failures head on, but it will take time to put right and get us back on track to ending homelessness and for good.

We are already tackling the root causes of homelessness. This Government will deliver the biggest increase in social and affordable housebuilding in a generation, and with the Renters Rights’ Bill we will abolish section 21 “no fault” evictions, preventing private renters being exploited and discriminated against, and empowering people to challenge unreasonable rent increases.

We are also taking action to support councils to deliver homelessness and rough sleeping services. In the autumn Budget, we announced that funding for homelessness services is increasing next year by £233 million compared to this year, 2024-25. This brings the total spend on homelessness and rough sleeping to nearly £1 billion in 2025-26, a record level of funding.

Today I am setting out how we will use that funding to deliver three important changes as the first steps in our long-term plan to tackle homelessness.

First, we must increase our focus on prevention and stopping households from becoming homeless in the first place. The current system is not working, and local authorities have been unable to invest in preventative interventions. This results in more households entering temporary accommodation, at great cost to the individuals and the council.

I am therefore providing an uplift of £192.9 million to the homelessness prevention grant, bringing total funding for 2025-26 to £633.2 million, the largest investment in this grant since it began. This will be allocated to all local authorities in England based on homelessness pressures. We will require at least 49% of this grant to be spent on activities to prevent and relieve homelessness, including associated staff costs, to help ensure this increase in funding is used to prevent families and single people from reaching crisis point.

Secondly, we must address the growing use of bed-and-breakfast (B&B) and nightly-let accommodation for homeless families. The number of families living in these types of emergency accommodation has nearly doubled in three years, with 4 in 10 homeless families living in B&B or nightly-let accommodation. Not only do these forms of accommodation provide limited stability for families and often lack basic facilities such as proper cooking facilities, they are also among the most expensive for councils. We must address this and ensure that where homelessness cannot be prevented, temporary accommodation provides safe, decent housing with as much stability for children as possible. I want to see the use of emergency accommodation for homeless families reduce and to eliminate the use of B&Bs for families other than in genuine emergencies.

As a first step to addressing this, my Department will work with 20 local authorities facing the most acute pressures for B&B use for temporary accommodation through a new programme of emergency accommodation reduction pilots, backed by £5 million to test innovative approaches and kick-start new initiatives. My Department’s team of homelessness experts will work in partnership with pilot local authorities to identify solutions which work for their local circumstances and share the learning across the country.

Thirdly, we must streamline funding structures, reduce bureaucracy and support councils to do what they do best: deliver services to meet the needs of their local communities. Our rough sleeping and single homelessness programmes, including our new streamlined rough sleeping prevention and recovery grant, will provide up to £280.75 million in funding in 2025-26, allocated to local authorities and their delivery partners across the country to help support them to continue vital services for some of the most vulnerable people in society. Our sector support grants will continue to support the skills and capacity of our valued voluntary sector partners. Our investment in prevention will stop people from rough sleeping in the first place, meaning local authorities will be able to target their rough sleeping resources at those who need help the most.

In addition, 15 local area partnerships across England will continue to be supported through the changing futures programme. We are providing £10 million in 2025-26 to improve support and outcomes for people experiencing multiple disadvantage.

This is only the first step to meeting our commitment to getting the country back on track to ending homelessness. We will continue to work across government to deliver the long-term solutions we need to get us back on track to ending all forms of homelessness, including developing a long-term homelessness strategy, which we will publish next year following the multi-year spending review.

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