Spending on temporary accommodation by council homelessness services in England rose to more than £1.7 billion in the year to March, with bed and breakfast costs up by a third.

Housing charity Shelter branded the situation “outrageous” and “illogical”, accusing the Government of throwing money at “grim B&Bs” instead of working to help families into homes, while a supported housing provider described it as a “growing humanitarian crisis in England”.

A total of £1.74 billion was spent on temporary accommodation including private sector accommodation leased by local authorities, hostels, refuges, and B&Bs between April 2022 and March this year, according to figures published by the Department for Levelling Up, Housing and Communities.

This is up by around 9% on the previous year’s figure of £1.59 billion.

These are the gross figures, so do not take into account sales, fees and charges and other council income.

When these are accounted for, the net expenditure on overall temporary accommodation to March this year was £657 million, up from £585 million the previous year.

The 2021/22 figures have not been adjusted for inflation.

B&B accommodation alone accounted for almost half a billion in gross costs in the same period, up by a third on the previous year from £369 million to £492 million.

Government statistics released in July showed that the numbers of households and children in temporary accommodation in England are at record highs.

Some 104,510 households were in temporary accommodation by the end of March – a 25-year high.

The total number of children in this situation is also at the highest level since records for that measure began in 2004 – with 131,370 children living in temporary accommodation as of the end of March this year.

Of the latest figures, Shelter’s chief executive Polly Neate said: “Not only is £1.7 billion spent on temporary accommodation outrageous, but it’s also illogical.

“We simply can’t keep throwing money at grim B&Bs and hostels instead of focusing on helping families into a home. With a general election on the horizon, no one can afford to continue to ignore a crisis of this magnitude.”

She said contributory factors to the issue include housing benefit not covering soaring private rental costs and a severe lack of social housing.

She said: “Housing benefit should cover the bottom third of local rents but the Government has kept it frozen since 2020 while private rents have skyrocketed.

“This decision combined with the decades of failure to build enough social homes has meant that families can’t find anywhere affordable to live and as a result are forced into homelessness in cramped and unsuitable temporary accommodation, often miles away from their children’s schools and support networks.

“As an immediate solution, it’s vital the Government uses the autumn statement to unfreeze housing benefit so it does what it’s meant to do: stop people on low incomes from becoming homeless. However, the only lasting solution to the housing emergency is to invest in genuinely affordable social homes with rents tied to local incomes.”

Riverside, an organisation which describes itself as one of the country’s leading developers of affordable housing and providers of homelessness services and supported housing, said the rise on B&B spending is “worrying” but “sadly not at all unexpected”.

John Glenton, its executive director, said: “The number of people living in temporary accommodation or facing homelessness is becoming a growing humanitarian crisis in England, particularly for families living together in single-room B&Bs.

“Spending on temporary accommodation overall has risen 9% year-on-year and spending on B&Bs has risen by a third (33%) year-on-year, despite the problems that living in single-room accommodation can cause for families.”

Referring to Prime Minister Rishi Sunak’s Conservative Party conference slogan of “long-term decisions for a brighter future”, Mr Glenton said the Government must “apply this logic of long-term decision-making to the housing and homelessness crisis we now face”.

He added: “If more funding was invested in building new social housing, homelessness prevention and tenancy sustainment, we would reduce spending on temporary accommodation.

“This would deliver significant savings for the public purse and families themselves will also benefit by being able to rebuild their lives more quickly and more sustainably.”

Darren Rodwell, housing spokesperson for the Local Government Association, called for local housing allowance rates to be “urgently reviewed“ to make the market more affordable for people, for the Government to develop a cross-departmental homelessness prevention strategy and to give councils powers to build 100,000 social homes a year “to address the national shortage of affordable housing”.

A Government spokesperson said: “We are determined to prevent homelessness before it occurs and have given £2 billion over three years to help local authorities tackle homelessness and rough sleeping, targeted to areas where it is needed most.

“Councils have a duty to ensure no family is left without a roof over its head and government funding can be used to help people find a new home, work with landlords to prevent evictions, or to pay for temporary accommodation.

“We are already investing in more social and affordable housing and, since 2010, have delivered over 659,500 new affordable homes, including over 166,300 homes for social rent.”