Homelessness: Who profits from destitution?

Government statistics are notorious for underplaying the number of rough sleepers in the UK. However, there are at least 3,975 rough sleepers in London, a figure that has risen by 8% in the last year. Numbers of destitute people are likely to increase in the wake of the cuts to benefit entitlement and the criminalisation of squatting. Tom Anderson spotlights some of the organisations in receipt of government funding to support the homeless.

Providing support to homeless people has long been an area left to the charitable sector. A diverse array of charities and housing associations* have provided varying degrees of support to homeless people over the years. However, services for homeless people in the UK are becoming more and more commodified and the entities vying for funding increasingly behave like private companies.

Although a comparatively small pot of money is allocated to the support of homeless people the state does not have the same legal responsibility as for, for example, people with learning disabilities. Homelessness is not included in the government's list of the factors defining a 'vulnerable adult' and local authorities do not have a legally defined duty of care for the homeless. The comparatively small pot of government money, amounting to approximately £400m, that is reserved for homeless provision is split between an ever smaller number of increasingly large service providers who now hold a near monopoly on what is beginning to resemble a 'homelessness market'.

Local government commissioning policy has squeezed out smaller charities in favour of a few large housing associations. Larger housing associations, which operate UK-wide, are able to develop strong relationships with both central and local government and, as a result, are more likely to be awarded local government contracts than small charities. The small pool of council funding for homeless services is periodically opened to bidding and each bidding process results in more funding for larger organisations. This process effectively renders the support of vulnerable people a commodity to bid for.

So how can organisations make money out of destitution? Charities and housing associations are not-for-profit entities. However, the salaries of their chief-executives increase, sometimes to hundreds of thousands of pounds a year, as the organisation expands. The expansion of such organisations is subsidised by state funding and by the housing benefit paid on behalf of the people who they provide a service for.

Case Studies

St Patrick’s is a charity-run men's hostel and night-shelter providing accommodation to 43 people in Brighton and Hove. The former church was converted into a hostel in 1985. Since then it has been the only place in Brighton and Hove where homeless men are able to turn up, without a referral, and get a bed the same night, there are no similar services for women.

St Patrick’s hostel has been in a long running conflict with Brighton and Hove Council, because the night shelter provides beds to people without a 'local connection'. Brighton and Hove Council, like most other councils across the UK, has adopted a 'local connection policy', barring people who cannot prove a connection to Brighton and Hove from services. 'Local connection' status is assessed on the basis of several criteria including; how long a person has lived in the area, whether they have had close family living in the area for more than five years, whether they require specialist health treatment or have a local job. People who have been discharged from a local hospital or released from a local prison do not necessarily qualify. St Patrick’s has refused to implement the local connection policy and has provided night-shelter services to anyone who needs them. The council's response has been to accuse St Patrick’s of increasing the city's homeless population by inviting an influx of homeless people seeking accommodation. On this basis, the council has refused funding to the St Patrick’s night shelter, because of concerns over Brighton and Hove being “flooded” by homeless people.

St Patrick’s has now been taken over by Riverside Housing association. Riverside is one of the UK's largest supported housing providers with assets worth almost £17m and an annual turnover of £250m. When Riverside began its take over of St Patrick’s, it initiated a review of the night-shelter service. During the review process Riverside employees said that the night-shelter would have to prove it was viable, in other words that it could pay for itself, and that it could generate “excess”. It was clear, also, that keeping the night-shelter open would risk conflict with the council. At the end of the review process Riverside announced it would close the night shelter, but keep the hostel open.

St Patrick’s night-shelter is now set for closure on January 31st 2012. At the meeting where staff were informed of the news, Riverside management said that the closure was partially due to the council's local connection policy and the “viability” of the night shelter. They said the shelter had no “potential for development”. Riverside said that the council would “not be offering alternative accommodation” to residents of the night shelter and that the nearest remaining night-shelter would be in Crawley, 22 miles away.

For Riverside, closing the night-shelter was a logical decision, not because it is in the best interest of the people using its services, but because keeping the council sweet means that they are more likely to gain lucrative contracts in future commissioning processes. More contracts and, thus, more expansion means more money for their chief-executives.

For homeless people in Brighton and Hove the decision is disastrous as it will mean the closure of the only service available to homeless men unable to navigate council bureaucracy. It will mean more people remain on the street and will put lives at risk.

St Patrick’s provides a unique and essential service for homeless men in Brighton and Hove. The takeover by Riverside has, undoubtedly, made the service worse rather than better.

Services like St Patrick’s night-shelter are sorely needed. A recent report by the homeless advocacy charity CRISIS has shown that homelessness is on the increase nationally since the financial crisis and warns that cuts to housing benefit will put many people at increased risk of homelessness. Workers at St Patrick’s say that more people than ever are applying for spaces at the night-shelter.

Another example of the commercialisation of council homeless services can be seen in the practices of Brighton and Hove's Rough Sleepers Team (RST), the body which refers homeless people to support services in the city. The RST was created in 2001 by the, tellingly named, Crime Reduction Initiative (CRI), through funding from the council.

The CRI is a large UK-wide charity with an annual income of almost £60m, approximately £40m of which is expended on staff costs.

RST bids for contracts from the council on the basis of its success in 'combating homelessness'. One of the requirements of its funding is to carry out head-counts of rough sleepers in the city. However, the continuing success of its commissioning bids relies on these figures going down rather than up. One way to ensure that this is the case is to massage the figures.

One way in which numbers are kept low is by narrowing the definition of a rough sleeper .When workers have done head-counts in previous years they have not included people who were standing up when surveyed and have stipulated that in order to be counted as rough sleepers people must have a sleeping bag or bedding with them. These stipulations were altered in 2010. However, at an inter-service meeting earlier this year workers for RST admitted that RST deliberately referred people to emergency temporary accommodation at the time of the head-count, in order to keep down rough sleeper figures. They confirmed that these people were only being housed for the duration of the head-count for the sole-purpose of keeping the figures down, and, often, were people who RST would never ordinarily refer for such accommodation.

All of this serves to keep the rough sleeper figures down, creates the impression that the RST are doing a good job and thus increases CRI's potential for success in bidding for contracts. However, it does not serve the needs of the rough sleepers themselves. As a result of the fact that the official figures show that there are less rough sleepers than there really are the council is able to keep funding for homeless services artificially low.

The not-for-profit industrial complex

Charities and housing associations involved in providing services to the homeless are not-for-profit organisations. However, this does not prevent the individuals in control of these organisations from acting against the best interests of the people they claim to work for. The average pay for chief-executives of housing associations currently stands at over £150, 000 per annum with Deborah Shackleton, Riverside's chief-executive, being paid £232,000 in 2010 (compared to £129,000 in 2003). Executive salaries increase as the organisations expand. Rating the organisation's viability and ability to acquire more and more contracts as a higher priority than the needs of homeless people makes good business sense.

* Housing associations are not for profit bodies that provide comparatively low-cost housing for people in housing need. Any trading surplus acquired from rents must be used to maintain existing homes and to help finance new ones. However, housing associations are becoming more commercialised because as the organisations expand the salaries of their chief executives rise.

London Coalition Against Poverty & Hackney Housing Group

There is strength in numbers. The London Coalition Against Poverty (LCAP) works on this basic principle whenever they go to the housing office, because what can the housing office do when a group of ten people arrives all demanding to be rehoused? They can threaten to call the police, but really, they have a duty to house, which they can't duck out of when challenged in this way. That’s precisely why the Hackney Housing Group, a part of LCAP, went to the housing office one morning when a building, housing around thirty men, women and children and run by a negligent landlord, was deemed unsuitable to live in and given a Prohibition Order by the council. These tactics work. Like other groups in LCAP, the Hackney Housing Group is a self help and voluntary group. In other words, its members act to support each other in their housing crises and learn from each other collectively at meetings, trainings, and demonstrations. Members go with each other to the housing office in pairs or in larger groups to demand better living conditions in leaking and cockroach infested hostels; challenge a housing decision because it’s been three months not six weeks; or demand temporary accommodation because it was denied before an assessment was even carried out, to name just a few examples.

In the case of the derelict building, all persons from that building have been given temporary accommodation or secure housing if they are single. The Hackney Housing Group works to pressure the council to do its job as it ought to do. And with further housing cuts and lack of affordable housing, the group believe that councils should expect more groups like them, demanding their rights to shelter. Now, more than ever, HHG believes we must organise to find our strength in numbers together to defeat the current attacks on social housing.


References - This article is partially based on interviews with several workers for homelessness service providers in Brighton and Hove.

- A map of reported homelessness statistics in the UK has been published in The Guardian: www.guardian.co.uk/news/datablog/2011/jun/09/homelessness-england-data - A statistical breakdown of the current situation for homeless people in England has been published by CRISIS: http://society.guardian.co.uk/salarysurvey/table/0,,1034758,00.html.

- Government policy on homelessness can be found here: www.communities.gov.uk/housing/homelessness/. - Government statistics can be found at www.communities.gov.uk/publications/corporate/statistics/homelessnessq22011 - Details of the salaries paid to the chief-executives of UK housing associations in 2011: www.insidehousing.co.uk/need-to-know/surveys/the-big-freeze/6517797.article. For the sake of comparison 2003 salaries can be found at http://society.guardian.co.uk/salarysurvey/table/0,,1034758,00.html.

- You can read about the definition of 'local connections' in more detail on Shelter's website: http://england.shelter.org.uk/get_advice/homelessness/help_from_the_council/what_the_council_will_check/local_connection.