The city council’s ability to fund homelessness services is under “severe pressure” because demand is so great, leader Jane Mudd told cabinet colleagues on Wednesday January 10.
So far this financial year, the council has overspent by more than £2 million against its budget for housing and communities, “primarily” because of homelessness provision.
The cabinet noted the cost-of-living crisis had pushed more people closer to poverty and at risk of losing their homes.
“We’ve got intense levels of high demand, coupled with a low supply of accommodation,” Cllr Mudd said.
The council therefore is “reliant on expensive forms of temporary accommodation” such as bed and breakfasts, and “high street hotels”.
A nightly stay in this type of accommodation typically costs the council £65, equivalent to around £23,000 a year, Cllr Mudd added.
A cabinet report shows Newport City Council has seen a “significant increase in costs” in the last two years, in light of a new Welsh Government policy to “dramatically reduce homelessness”.
The council has overspent because it has not “identified” a way to raise “sufficient income to offset costs”.
More demand for homelessness support has had a knock-on effect for the council, which also has to spend more money on staffing costs to provide the extra support.
“The level of challenge is unprecedented,” Cllr Mudd said.
Newport City Council has announced plans to spend an extra £600,000 on homelessness services in its next budget, and will also outsource “specialist debt advice” to Citizens Advice for people who are homeless or threatened with homelessness.
Welsh Government figures show 540 households in Newport were under threat of homelessness last year, in what was the fifth-highest number of any Welsh council.
Figures also show Newport consistently has among the highest numbers of rough-sleepers.
The latest Welsh Government provisional figures show 35 of the nation’s 135 recorded rough-sleepers were in the city in September – the highest number of any council area in Wales.
Story by Nicholas Thomas