Source · Select Committees · Public Accounts Committee
Recommendation 28
28
Accepted
MHCLG acknowledges poor coordination of homelessness funding, committing to synthesise multiple grant streams
Recommendation
We pressed MHCLG on the poor coordination in funding for homelessness caused by the absence of a cross-government strategy. Local authorities need to understand numerous funding streams, from different government departments. MHCLG explained that its November 2024 local government funding policy statement undertook to roll together three of its funding streams for 2025–26–the Rough Sleeping Initiative, the Ex-Offenders Grant and Housing First–to sit alongside the main Homelessness Prevention Grant. It acknowledged there were too many funding streams going into local government and said that it is committed to synthesising other grant funding in the following year. More broadly, MHCLG expects the forthcoming strategy to draw on the results of the 2025 spending review in setting out how it will address homelessness for the next few years.39
Government Response Summary
The government agrees with the recommendation to improve funding coordination for homelessness, committing to consolidate three grants for 2025-26, and planning wider local government finance reform from 2026-27 to simplify grant funding and explore further homelessness grant consolidation.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: after Spending Review 2025 5.2 For 2025-26, MHCLG will be consolidating its main rough sleeping and single homelessness focused grants (Rough Sleeping Initiative, which includes Housing First funding, and Accommodation for Ex Offenders) into a single grant outside of the Settlement, to run alongside the Homelessness Prevention Grant. These two, targeted grants will put an end to bidding processes and enable local authorities to more efficiently and flexibly plan and deliver services. 5.3 From 2026-27, MHCLG is planning reform of the wider local government finance system with a consultation currently open on the principles and objectives that underpin these changes. This will include an updated assessment of local authorities’ need and their available resources. In addition to reforming how funding is distributed, the government has committed to simplifying the wider local funding landscape, reducing the number of individual grants and consolidating them into the Local Government Finance Settlement where possible. This will provide local authorities with more flexibility to meet the needs of local people, and to decide how best to deliver on national priorities. 5.4 As part of these reforms, MHCLG will explore options for aligning Homelessness Prevention Grant funding with rough sleeping funding and consider whether and how to consolidate homelessness grant funding into the Local Government Finance Settlement. The government is committed to resetting the relationship with local government and providing greater freedoms. MHCLG is considering how to deliver this consolidation in a way that ensures homelessness pressures are addressed and supports government’s commitment to getting back on track to ending homelessness, alongside meeting these wider ambitions.