Homelessness: Funding

Steve Race Excerpts

Tuesday 2nd December 2025 Westminster Hall

[Steve Race (Exeter) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Vickers. I thank the hon. Member for Harrow East (Bob Blackman) for initiating this debate. I ask Members to note my entry in the Register of Members’ Financial Interests; I am a patron of my local homelessness charity, St Petrock’s.

As the largest urban centre for a very wide geography, Exeter has always had a pull factor for people whose housing situation deteriorates. We know that under 14 years of Tory government, homelessness increased substantially again after a period under the last Labour Government when it fell to historic lows due to political attention and drive. The factors driving homelessness are often complex, ranging from benefit changes and poverty to family breakdown, family violence or substance abuse. Researchers at the University of Exeter also look at the little-understood link between acquired brain injury and homelessness. Most people sleeping rough have experienced trauma, either as a child or—as with the veterans who find themselves homeless—in their working life, serving our nation.

According to CoLab Exeter, the city’s homelessness cases have the highest prevalence of complex support needs in the region. I am sad to say that Exeter has one of the highest rates of homeless deaths in the country. That is due in part to the pernicious impact of the highly addictive and dangerous drug Spice on our homeless population. I would like to see that scourge gripped by national authorities.

In this context, there are some bright spots, but there are also areas of significant concern. First, I am pleased that the Government have recently added a further £500,000 to Exeter city council’s budget for homelessness from the rough sleeping prevention and recovery grant, taking our budget this year to £1.8 million. That new money will partly support substance abuse services and children in temporary accommodation. I thank the Minister for that. However, our city, despite being the economic driver for the region and a fast-growing city, sits in a two-tier local government system, with Devon county council as the upper-tier authority with a far larger core budget. Supporting homeless people has historically been divided between the remits of Devon county council and Exeter city council, with housing a city council responsibility and the provision of care and support to an individual a county responsibility. That is where we have far more serious problems.

After proposing at a budget meeting in 2023 to cut its entire £1.4 million homelessness budget for this financial year, the majority of which is spent in Exeter, Devon significantly reduced that budget from £1.4 million to £1 million and then to just £500,000 next year, or to zero; it is not entirely clear to stakeholders. For this year, I am told that the grants have not been paid in full. One stakeholder was informed that they would get Q1 and Q2 payments and a smaller payment—about half of one quarter payment—for the remaining two quarters of the year. There has been little to no communication to service delivery partners, including our local YMCA, which delivers transitional housing for previously homeless people, about the funding decision since it was proposed about 18 months ago.

Providers are therefore working on the assumption that they will lose a majority of their funding from April next year. That means that vital emergency off-the-streets bed spaces and longer-term supported accommodation will be lost. The local support pathway out of homelessness will be significantly damaged, with no funding from other sources available to replace that lost funding.

One organisation, Bournemouth Churches Housing Association, has confirmed that its funding for this financial year has been reduced by 28%, after 10 years without inflationary increases. Its contract with Devon county council ends at the end of March 2026. There is a realistic possibility that Gabriel House, the main hostel provision for people transitioning out of rough sleeping, may close. Gabriel House accommodates 42 former rough sleepers and provides the main stepping stone from the street to more stable housing.

Exeter is already feeling the impact of the decision. At November’s annual rough sleeper count, our team saw a significant increase in the number of people they identified sleeping on the city streets. Another provider, Julian House, has had to close services, as funding to Exeter city council from the rough sleeper initiative and rough sleeper accommodation programme has been cut over previous years.

Labour introduced the Supporting People programme in 2003 as a ringfenced fund, which successfully reduced homelessness and rough sleeping, along with providing a net saving to the Exchequer due to the impacts on other budgets such as health, criminal justice and so on. However, ever since the ringfence was removed in 2009 and the budget absorbed into local authority core grants under the coalition Government, as the hon. Member for Harrow East mentioned, local authorities have been diverting funding to other uses, with the results that we see daily on the streets. I therefore ask the Minister to give serious consideration to reintroducing the ringfence on homelessness prevention funding from central Government to local authorities.

I have received helpful information from the Department, through the Parliamentary Private Secretaries, about the replacement of the rough sleeping initiative and the rough sleeping prevention and recovery grant. However, given that the funding for next year is wrapped up in the local government financial settlement, stakeholders and delivery partners are, at this point, assessing their ability to make it to the end of March without knowing what funding will be made available. That will have a destabilising impact on homelessness prevention services. RSI contracts end in March, so providers will potentially be winding down the projects and beginning redundancy processes in advance of those contracts ending.

I encourage the Minister to view homelessness prevention and elimination through a Total Place-style model in the upcoming homelessness strategy, which is essential if we are to tackle multiple disadvantage rather than continually managing crisis. Although Total Place was mentioned in the Budget, it was limited in its development to five mayoral authorities, which risks leaving places such as Exeter behind at a time when instability is accelerating. Exeter could be an ideal pilot for a Total Place model in a smaller city undergoing transition and, hopefully, devolution, allowing us to demonstrate how integrated preventive investment can work effectively outside larger metropolitan areas.

I pay tribute to the excellent organisations in Exeter that, despite pressures on capacity and funding, have provided vital support for our homeless population and have a wider beneficial impact in our city, including St Petrock’s, the YMCA, CoLab, Gabriel House and Julian House. These organisations do not just need an adequate sum of funding; they also need clarity on where that funding will come from.

Funding uncertainty is part of a long-standing challenge embedded by two-tier delivery of local services—one that I am hopeful will be addressed by local government reorganisation. That is why Exeter city council has applied for unitary status on expanded boundaries. I look forward to working on that with MHCLG.

[Martin Vickers (in the Chair)]

I am afraid that that was not a good example of a four-minute speech. Jim Shannon will show us how it should be done.