The Impact of Economic Downturns & Budget Cuts on Homelessness Claim Rates Across 323 Local Authorities in England, 2004-2012

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.

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.

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.

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.

Below:  Change in homelessness claim rates between 2009 and 2012 across 323 local authorities in England

Below: Trends in mean homelessness claim rates across 323 local authorities in England, 2004–12. Notes: Authors' calculations.³⁴Austerity denotes beginning of spending cuts in UK, as outlined in initial 2010 Spending Review.²² Accepted claims: households meeting criteria for statutory homelessness assistance from local authority. Unaccepted claims: households who applied, but did not meet criteria, for statutory homelessness assistance from local authority.

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By: Loopstra R1, Reeves A1, Barr B2, Taylor-Robinson D2, McKee M3, Stuckler D4.

• 1Department of Sociology, Oxford University, Oxford OX1 3UQ, UK.
• 2Department of Public Health & Policy, University of Liverpool, Liverpool L69 3GB, UK.
• 3Department of Public Health & Policy, London School of Hygiene & Tropical Medicine, London WC1H 9SH, UK.
• 4Department of Sociology, Oxford University, Oxford OX1 3UQ, UK Department of Public Health & Policy, London School of Hygiene & Tropical Medicine, London WC1H 9SH, UK.