It is now commonly recognised that in the face of rising homelessness and housing shortages, local authorities are increasingly challenged to provide Temporary Accommodation (TA) that is sufficient in both quantity and quality.  As a result, increasing demand and a shortage of supply is now pushing many local authorities into financial difficulties.  

This is happening despite the fact that local authorities often have extensive property portfolios (which may include vacant assets) and manage a variety of leases, agreements, licences for properties and contracts for the provision of a range of different types of accommodation. We’ve explored whether a shift towards a more commercially minded approach to ensure local authorities are making the best use of these assets, could yield significant benefits, reduce cost exposure and enhance the supply of TA.

Three stages towards the adoption of a commercially minded approach to TA provision…

Through our work, we’ve found that by undertaking a proactive portfolio management approach, by leveraging council assets and adopting innovative strategies, local authorities can enhance the quality and supply of TA. At the same time, this commercially minded approach can also generate revenue to support reinvestment and fund other essential services. In this blog post, we explore what different strategies are available for local authorities to achieve this approach: 

01: The first place to start should be reviewing and understanding what assets a local authority already has available, by preparing and holding a comprehensive assessment of existing assets on an effective property data system, reviewing contracts and then utilising those assets to maximise opportunities for providing TA:  

• Adaptive reuse: Where there are vacancies, voids or under-occupancy, rather than letting council-owned properties sit idle, they can be repurposed for TA. This could involve converting unused office buildings, former schools, or disused warehouses into habitable spaces suitable for temporary housing. 

• Contract Management:  A review of existing leases and other contract agreements can ensure contracts are fit-for-purpose to deliver quality and value and identify areas for improvement and voids or underutilisation of assets is avoided.  This contract management can involve a number of different aspects including:
  • Establishing clear performance metrics and Key Performance Indicators (KPIs) to measure the effectiveness of TA contracts.
  • Evaluating the terms, conditions, and performance against the objectives that these properties were intended to achieve. Including an assessment of repair and maintenance liabilities and identifying any areas of concern or inefficiencies. 
  • Quality Standards and Compliance: Ensuring that contracts adhere to relevant quality standards, regulations, and legal requirements. This may include standards for housing quality, health and safety, accessibility, and safeguarding vulnerable individuals. 
  • Negotiation and Contract Renegotiation: Negotiating with existing providers or seeking new providers through competitive tendering processes. Renegotiating contracts to incorporate any necessary changes or improvements identified during the review. 

02: The second opportunity may be through considering different delivery mechanisms, such as:  

• Partnership opportunities: Collaborating with private developers or social enterprises can unlock additional resources and expertise. Joint ventures can lead to the development of mixed-use projects that combine TA with commercial or residential spaces, creating integrated communities. 

• Housing company review/ healthcheck: where local authorities have a housing company, a review could identify if this company could pivot to specialise in the delivery and management of temporary housing, giving the local authority both the supply and control needed to manage the quality and cost. 

• Innovation and Best Practices: Explore opportunities for innovation and best practice. This may involve alternative housing models, or partnership arrangements with community organisations or private sector entities. 

03: Thirdly, can additional or alternative funding streams be identified via Innovative Funding Mechanisms to unlock opportunities to fund TA projects such as:  

• Social Impact Investment: Local authorities can explore social impact investment opportunities to fund TA projects. This involves attracting private investors who are willing to provide capital in exchange for both financial returns and measurable social impact, such as reducing homelessness. 

• Asset Monetisation: Surplus council assets, such as land or underutilised properties, can be monetised through leasing agreements or long-term partnerships with developers. Revenue generated from these arrangements can be reinvested into TA initiatives. 

• Accessing Grant Funding: pursuing other funding streams to supporting the funding of additional properties such as CHAP funding to enable councils to purchase properties and convert them into accommodation for homeless households 

By taking a proactive portfolio management approach and embedding a commercial mindset, local authorities can leverage council assets effectively and help address the pressing need for TA while maximising social and economic benefits. Through strategic partnerships, innovative funding mechanisms, and a commitment to quality and sustainability, local authorities can make significant strides towards creating inclusive and resilient communities for all residents. 

If you would like to discuss how 31ten can support your authority’s approach to Temporary Accommodation please get in touch with Laura Bridges on laura.bridges@31tenconsulting.co.uk