Disappointing budget could impact work to tackle homelessness in Wales

The Welsh Government has published its draft budget for 2024/25, acknowledging that they have had to make difficult decisions about where to target investment, ensuring that frontline public services are protected as much as possible.

Welsh Government partly managed to do this by maintaining the Local Government Settlement ensuring that no local authority has a below two per cent increase. This was done to help safeguard schools and social care; another budgetary decision will have a significant impact on statutory homelessness services provided by local authorities. The Housing Support Grant has been maintained at current levels, it is a cash-flat settlement, which in effect means that it is a real-terms cut.

Furthermore, Welsh Government in 2023/24 proposed a £5 million increase to the homelessness prevention budget in its 2024/25 indicative budget. This increase has now been reduced to £2 million meaning local authorities will receive £3 million less to tackle homelessness. Vital monies needed as part of the aim to make homelessness in Wales brief, rare and non-repeated. This is a disappointing decision made at a time where the use of temporary accommodation is rising with 11,200 individuals including 3,500 children currently placed in temporary accommodation in Wales. The best way to reduce the use of temporary accommodation is preventing homelessness in the first place. Something that will be harder to do with a reduced budget in 2024/25.

CIH Cymru acknowledge preventing homelessness is only one part of the solution to the housing crisis. More accommodation is needed to move someone out of homelessness when it cannot be prevented. As such we welcome the Welsh Government's decision to maintain a record level of investment to develop 20,000 new low-carbon social housing in Wales.

The budget set out the following levels of investment for housing in Wales:

• Ongoing capital investment of £365 million in 2024/25 for building new low-carbon social homes through the Social Housing Grant
• £92 million to support decarbonisation of existing social housing
• £108 million for LSVT Dowry payments
• £127 million capital investment in building safety
• £35 million capital investment to tackle fuel poverty
• £4 million investment in the Homebuy scheme
• £8 million to tackle violence against women, domestic abuse and sexual violence
• £38.5 million for the Discretionary Assistance Fund

Matt Dicks, national director, CIH Cymru, said:

“The reality is that we are in the depths of a sustained and systemic housing emergency with 139,000 people, including at least 34,000 children, waiting for social housing in Wales in October. Furthermore, 11,200 people - including 3,409 children - are in temporary accommodation in Wales, and around 135 poor souls are still sleeping rough on our streets.

“It is welcome that the Welsh Government has maintained its commitment to supporting the development of 20,000 new homes at social rent through the Social Housing Grant - which is central if we are to have any hope of ending the housing and homelessness crisis.

“But if we build those homes, we need to ensure that we support some of the most vulnerable within our communities maintain their tenancies. Therefore, effectively cutting support for homelessness prevention means that we are likely to see the homelessness figures in Wales go in the wrong direction, particularly at a time when many are suffering the severe impacts of the cost of living crisis.

“CIH Cymru fully understands the budgetary settlement that the Welsh Government has been dealt – a £1.3 billion cut in real-terms – and the pressure faced by the NHS post-covid. So, granted there are really tough decisions for ministers to take, but unless we make providing everyone in Wales with a safe, sustainable, and affordable home a foundation mission, our own independent #BacktheBill research has shown that it will cost us billions further down the track, and that’s on top of the very real human misery caused by not having a place to call home.”

We will be producing a what you need to know guide for CIH members shortly.