Over the last five years some 166 councils across Britain spent more than £1.6bn on temporary accommodation for homeless people when there was no social housing available.
As well as privately rented homes, temporary accommodation includes emergency housing such as hotels, B&Bs, converted office blocks, shipping containers and hostels.
The data reveals the majority of the top 20 temporary accommodation providers in Britain were private companies.
The largest provider was housing association Notting Hill Genesis (NHG), which was paid £84.8 million by councils between 2019/20 and 2023/24.
Travelodge was also in the top 10, with the budget hotel chain having been paid £26.1m over the five-year period.
The spiralling cost of temporary accommodation has blown a hole in the budgets of a number of cash-strapped councils, with some now spending more than half of their total housing budget on emergency lets.
The local authority most reliant on temporary accommodation outside London was Bristol City Council, which spent £53m over five years.
Councillor Adam Hug, housing spokesperson for the Local Government Association, which represents councils, said: “More people than ever are turning to their council seeking homelessness support, and with increasing costs for temporary accommodation, it is putting unsustainable pressure on local government finances.”
Unlike social rents, which are set by the Treasury, private companies can also charge whatever they like in rent. As one local councillor, who wished to remain anonymous, said: “Providers have councils over a barrel.”
She said: “My Friday advice surgery, which I have been running for 27 years has become a temporary accommodation surgery where I discuss people’s fear of being made homeless and going into temporary accommodation – all too often in terrible conditions.
“I’ve had people who are living in accommodation that doesn’t have planning permission and have only discovered it when planning officers turn up and get them to leave – and this is the accommodation that council taxpayers are paying hundreds and hundreds of pounds for.”
74 children have now been recorded as having died while living in temporary accommodation. Figures from the NHS-funded National Child Mortality Database reveal that 58 of those children were babies under the age of one.
She said: “It shocks me that – even in the face of the latest statistics that the state of temporary accommodation is killing children – we are still not willing to talk about those [companies] who are profiting from the system as it stands.”
Dr Laura Neilson, chief executive of Shared Health Foundation (SHF), a medical charity which co-runs the temporary accommodation APPG, said: “This further evidence shows the urgent need for regulation. Regulation that covers standards of accommodation and regulation of procurement and how the public pound is being spent both at local and national level.”
More council bankruptcies feared as temporary housing costs soar to £1bn a year
Read MoreA shortage of affordable social or council housing, combined with rising homelessness due to evictions, has seen the number of people living in emergency temporary accommodation rise in recent years.
A total of 159,380 children were included among those households living in temporary accommodation.
“The only way out of this mess is to bring temporary accommodation costs down by building more homes and address the underlying causes of homelessness such as ‘no fault’ evictions.
“The Renters’ Rights Bill will deliver this and ensure safe, decent housing for tenants in temporary accommodation through the Decent Homes Standard.”
Private firms say they’re helping councils find safe accommodation
Elliot Leigh says its rents are set in collaboration with local authorities in a way that balances Local Housing Allowance (LHA) rates and an agreed subsidy that considers current market rents.
It described its new homes assessment process by its procurement team as “rigorous” and “highly selective in choosing the landlords we work with and the properties we lease”.
A spokesperson for Travelodge said: “We recognise the pressure local authorities are under and how difficult this is for them and for the people who desperately need a home.
“Like many other hotel providers, Travelodge works with local authorities to support them with their temporary accommodation needs whilst guests are waiting for a permanent home.
“Travelodge’s focus is on ensuring all of our customers have a high-quality experience across our hotels and we recognise that a hotel room is not a substitute for a home.”
Theori Property Management and Finefair did not respond to requests for comment.
NHG declined to comment.
An Enfield Council spokesperson said: “The housing crisis in the UK has worsened over the years, and temporary accommodation has unfortunately become a long-term solution for many families, despite it never being intended for that purpose.
Cllr Elizabeth Campbell, Leader of Kensington and Chelsea Council, said: “It’s no secret that the cost of temporary accommodation (TA) is causing huge financial strain for councils everywhere.”
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