Epsom and Ewell Council reports £875,000 overspend on homelessness budget
The overspending is largely attributed to a significant rise in demand for accommodation, with 114 households currently supported
Epsom and Ewell Borough Council has announced that expenditure on temporary accommodation for homeless households is set to exceed the budget for 2025/26 by £875,000.
The overspending is largely attributed to a significant rise in demand for accommodation, with 114 households currently supported in nightly paid housing compared to the budgeted figure of 70.
Limited affordable housing within the borough and increasing costs due to competition from other local authorities in Surrey and inner London have further exacerbated the financial pressures.
The council has taken several steps to manage homelessness and mitigate the overspending, including:
- Utilizing the Homelessness Prevention Grant (HPG) and homelessness grant reserves to address rising expenses
- Purchasing additional properties under the Local Authority Housing Fund 3 scheme to reduce reliance on nightly paid accommodation
- Holding forums with private landlords to encourage participation in the Private Sector Leasing (PSL) scheme
- Collaborating with housing associations to increase the availability of affordable housing
A recent service review has identified the need for enhanced homelessness prevention measures and more efficient resource management within the housing service.
These recommendations are expected to help reduce costs by improving service delivery.
The Ministry of Housing, Communities and Local Government (MHCLG) has provided additional grant funding of £135,408 for 2025/26 to alleviate some of the financial strain.
The Council is hopeful that revised formulas for the allocation of the Homelessness Prevention Grant (HPG) from 2026/27 could provide further financial relief, though these are unlikely to cover all temporary accommodation costs.
The Council’s Section 151 Officer warned of the risks posed by the current trajectory: “The escalating costs of temporary accommodation is placing significant pressure on the Council’s financial sustainability.
"Without major changes to how demand is managed the current trajectory risks pushing the Council into a position of financial stress. Rising demand, coupled with limited affordable housing options, means that urgent strategic interventions are needed to contain costs.
"Failure to act will not only impact the Council’s budget but also its ability to support vulnerable residents effectively.”
The council has committed to providing a further update on nightly paid accommodation expenditure at its Community and Wellbeing Committee meeting in March 2026.