Homelessness Prevention Grant Misallocation: Brighton & Hove's £31.4M Budget Crisis

1. The Scandal: Budget Documents Reveal the Real Story

Brighton & Hove City Council's 2025-26 homelessness budget tells a story that council communications are not publicising. The headline numbers:

Almost 9 in 10 pounds are going to provide temporary housing for people who are already homeless. Less than 1 in 10 pounds are going to prevent people from becoming homeless in the first place.

The strategy document acknowledges this is a "death spiral" — though not in those words. It states:

"Short-term cost pressures impede progress towards prevention strategies, and reliance on expensive spot purchasing for temporary accommodation increases costs."

But the council's response has not been to shift resources toward prevention — it has been to accept the situation as inevitable.

2. Where Government Grants Actually Go: The 78% Illusion

The council receives £10.9 million in Homelessness Prevention Grant (HPG) from the government annually. This grant is supposed to fund prevention — keeping people in homes, mediation services, financial advice, and emergency support to avoid homelessness.

The current reality:

• 78% of HPG (£8.5 million) → Temporary accommodation
• 22% of HPG (£2.4 million) → Prevention and relief services

The government, in its consultation on new HPG allocations (published June 2025), indicated that maximum 45% of HPG should go toward temporary accommodation in future. The remaining 55% should go to prevention and relief.

Brighton & Hove is currently allocating 78% to accommodation — 33 percentage points above the government's stated maximum.

The Document Evidence

From the Cabinet Brief (Section 6.4 of the Homelessness & Rough Sleeping Strategy 2025-2030):

"Under current legislation, local authorities are permitted to spend the Homelessness Prevention Grant to discharge any of their duties under homelessness legislation. At present 78% of the grant is spent on the cost of providing temporary accommodation."

This is not a policy choice. This is systemic dysfunction.

The Review of Homelessness (Appendix 2) shows:

• Prevention assessments fell from 854 (2023) to 594 (2024) — a 30% drop in a single year
• Relief duty acceptances rose from 261 (2020) to 616 (2024) — a 136% increase over four years

This trajectory is not accidental. When prevention services are under-resourced, fewer people are offered prevention support. More people reach crisis point. More people need temporary accommodation. More HPG money gets diverted to temporary accommodation. Fewer resources remain for prevention. The cycle continues.

3. Temporary Accommodation: The Cost Death Spiral

Between 2022 and 2024:

• Spot-purchased accommodation units: 114 → 379 (a 232% increase)
• Cost per unit: Rising year-on-year due to private sector inflation
• Projected cost increase 2025-26: 40% net cost rise over two years

The council cannot secure long-term block-booked arrangements with private landlords. As the strategy states:

"The private rented sector in the city used to be a source of lower cost block booked accommodation in the past. However, fewer units are now available through the sector, with landlords leaving the market as leases come to an end."

So the council is forced to procure accommodation in real-time — paying premium hotel and B&B rates. An internal council review in early 2025 concluded this "presented a significant corporate risk to the council."

The language is telling: a corporate risk, not a human crisis.

4. Government Grants: The Full Picture

Beyond the HPG, the council receives additional government grants for homelessness and rough sleeping services — none of which offset the structural misallocation of prevention funding:

Council's own budget contribution: £7.9 million
Income (rents, fees, charges): £8.7 million

Government grants are designated for specific purposes. HPG can legally go to prevention or accommodation — but if the council treats accommodation as the default, the grant is consumed there. Brighton & Hove is currently at 78% accommodation spending. To comply with government expectations from 2026-27, it needs to shift 33 percentage points.

5. The Prevention Funding Crisis: What 2024 Data Reveals

From the Review of Homelessness (Appendix 2), prevention duties by year tell a stark story:

• 2020: 776 prevention assessments
• 2021: 816
• 2022: 857
• 2023: 854
• 2024: 594 — a cliff-edge drop of 260 assessments (30%) in a single year

Meanwhile, relief duty acceptances (people who are already homeless at the point of assessment):

• 2020: 261 acceptances
• 2024: 616 acceptances (136% rise)

This is a pattern of gatekeeping. People who could have been offered prevention support — the 56-day intervention designed to prevent homelessness — are instead being processed at the relief stage: the 56-day support stage where the person is already homeless and typically in temporary accommodation.

When prevention services are under-resourced, gatekeeping becomes the structural norm. Fewer staff can assess fewer cases. Fewer preventions mean more crises. More crises mean more temporary accommodation. More accommodation costs consume more HPG. Less HPG available for prevention. The death spiral accelerates.

6. The HPG 45% Cut: Government's Announcement & Council's Non-Response

On 20 June 2025, the government published its response to the HPG consultation:

• Current HPG allocation (2025-26): £10.9 million
• Future allocation (2026-27): £6.0 million
• Annual loss: £4.9 million (45% cut)

The government's rationale was a new formula to "fairly reflect need." But the council with the highest homelessness rate in England — 1 in 77 people, against a national rate of 1 in 200 — is receiving a 45% cut.

What Did Brighton & Hove Council Do?

According to the Cabinet Brief:

"Notably, following a formal consultation on the HPG funding formula for 2026-27, Brighton Hove City Council faces a potential reduction of approximately 45%, falling from £10.9 million in 2025-26 to £6.0 million in 2026-27. Although transitional arrangements may partially cushion the impact, the reduction in grant income across the Medium Term Financial Plan will still be considerable."

That is the entirety of the council's documented response. One paragraph. There is no evidence in the published record of:

• Formal representations to MHCLG to challenge or reverse the cut
• Cross-council advocacy with other high-need authorities
• Emergency funding applications for prevention innovation projects
• Political leadership, media campaign, or public pressure
• Engagement with the Mayor of London or Mayoral authority equivalents
• An alternative funding strategy to bridge the gap

The word "acceptance" would be too generous. The council's posture is closer to passive resignation in the face of a crisis of its own structural making.

7. What This Means: The 2026-27 Crisis

From 2026-27, the council simultaneously faces:

• 45% reduction in HPG — a loss of £4.9 million per annum
• No confirmed RSPARG funding — currently £2.4 million per year, with no commitment beyond 2025-26
• NHS and charitable sector funding under pressure (stated in Cabinet Brief)
• Rising temporary accommodation costs — projected to continue increasing due to spot purchasing dependency

The council's own risk assessment (Section 8.2 of Cabinet Brief) states:

"The most significant risk is a failure to shift the balance between relieving homelessness and preventing homelessness."

The council has identified the risk. It has not, on the evidence of the published documents, produced a credible plan to address it. Without a fundamental reallocation of resources toward prevention, the 2026-27 HPG cut will accelerate every negative trend visible in the 2024 data.

Casefile: Key Dates & Events

8. Questions for Council: FOI Requests & Scrutiny

9. Call to Action

"A city with the highest homelessness rate in England — 1 in 77 people against a national rate of 1 in 200 — should not be receiving a 45% cut to its prevention grant. And it should not be spending 78% of that grant on temporary accommodation in the first place."