The impact of economic downturns and budget cuts on homelessness claim rates across 323 local authorities in England, 2004–12

Background: It is unclear why rates of homelessness claims in England have risen since 2010. We used variations in rates across local authorities to test the impact of economic downturns and budget cuts. Methods:Using cross-area fixed effects models of data from 323 UK local authorities between 2004 and 2012, we evaluated associations of changes in statutory homelessness rates with economic activity (Gross Value Added per capita), unemployment, and local and central government expenditure. Results: Each 10% fall in economic activity was associated with an increase of 0.45 homelessness claims per 1000 households (95% CI: 0.10–0.80). Increasing rates of homelessness were also strongly linked with government reductions in welfare spending. Disaggregating types of welfare expenditure, we found that strongest associations with reduced homelessness claims were spending on social care, housing services, discretionary housing payments and income support for older persons. Conclusions:Recession and austerity measures are associated with significant increases in rates of homelessness assistance. These findings likely understate the full burden of homelessness as they only capture those who seek aid. Future research is needed to investigate what is happening to vulnerable groups who may not obtain assistance, including those with mental health problems and rough sleepers.