An east London borough has warned it is hurtling towards bankruptcy over spiralling homelessness and private rental costs.Newham town hall is facing “considerable financial pressures” because of its temporary accommodation bill for homeless families and without support it “could face an unprecedented budget gap of £175 million” by 2026.The council is forecasting a £40million overspend in this financial year, on top of the £22 million in 2023, because of the rising costs of rents.
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00:00An East London borough has warned it is close to facing bankruptcy over spiralling homelessness and private rental costs.
00:07Newham Town Hall is facing considerable financial pressures because of its temporary accommodation bill for homeless families
00:14and without support it could face an unprecedented budget gap of £175m by 2026.
00:22The council is forecasting a £40m overspend in this financial year on top of the £22m in 2023 because of the rising cost of rent.
00:33Newham is currently supporting around 6,500 families in temporary accommodation and has more than 38,000 households on its social housing waiting list.
00:44The town hall blames the high reliance on the private rental sector and with a declining number of properties,
00:49a 35% fall in council housing stock and benefits not keeping up with inflation.
00:55They say its temporary accommodation bill was the sole reason for the overspend and that without it the budget would be balanced.
01:03Analysis by London councils show the capital's town halls collectively spend £90m a month on temporary accommodation.
01:10This is up by almost 40% on last year.