Key Points
- Cllr Peter Zinkin, Leader of the Conservative Group on Barnet Council, warns that spiralling temporary accommodation costs threaten the long-term financial viability of outer London boroughs like Barnet.
- Barnet Council’s shortfall for temporary accommodation is forecast to exceed £30m annually by 2030, alongside pressures from adult social care, children’s services, and debt interest.
- Central government subsidy is capped at outdated Local Housing Allowance (LHA) rates, while London market costs far exceed these, burdening local taxpayers.
- Councils across England spend billions yearly on temporary accommodation; London’s subsidy gap alone runs into hundreds of millions pounds annually.
- Two anonymised Barnet cases highlight dilemmas: a local family with disabilities unable to find in-borough housing within LHA limits, and former asylum seekers with needs transferred from Home Office accommodation.
- Random Home Office placements in high-cost areas like Barnet force councils to absorb costs post-status grant, raising fairness issues for local residents.
- Universal services like parks and street maintenance are squeezed to fund national policy burdens; solution requires Westminster to align subsidies with real costs and handle asylum finances nationally.
Barnet, North London (North London News) January 30, 2026 – Cllr Peter Zinkin, Leader of the Conservative Group on Barnet Council, has issued a stark warning that temporary accommodation costs are “out of control,” projecting a shortfall exceeding £30m a year by 2030 for the borough. In outer London boroughs such as Barnet, these spiralling expenses rank among the gravest threats to council financial stability, compounded by adult social care, children’s services, and mounting debt interest, as detailed in Zinkin’s analysis. Councils face a strict legal duty to house homeless households, yet the funding system is “fundamentally broken,” with subsidies fixed at LHA rates that fail to match London’s real market prices.
What Drives Barnet’s Temporary Accommodation Crisis?
The mismatch between government subsidies and actual costs leaves local taxpayers footing the bill, as Cllr Zinkin explains: “Central government subsidy is capped at Local Housing Allowance (LHA) rates, while the actual cost of securing accommodation in London routinely exceeds those limits. The difference falls directly on local taxpayers.” Much of the subsidy ties to rates set over a decade ago, bearing “little resemblance to today’s market,” leading to hundreds of millions in annual gaps across London boroughs.
Analysis by London Councils reveals eight boroughs spent £543m on temporary accommodation in 2024/25, with a £223m shortfall after subsidies, projecting a citywide figure over £740m yearly. Barnet’s net spending hit £11.4m in recent figures, reports Data Reporter Sonja Tutty of Barnet Post, contributing to broader overspends like £5.5m in housing services. Nationally, council spending reached £2.8bn in 2024/25, with the Local Government Association (LGA) forecasting a £3bn “funding black hole” by 2029/30.
Cllr Grace Williams, London Councils’ Executive Member for Housing and Regeneration, stated: “Boroughs are doing everything they can to support homeless families, but the system is buckling under the strain. The housing benefit system has failed to keep pace with reality – and councils are paying the price.”
How Do Real Cases Illustrate the Human and Financial Dilemmas?
Behind the statistics lie acute human challenges, as illustrated by two recent anonymised cases from Barnet cited by Cllr Zinkin. The first involves a long-established local family with deep borough roots and members facing significant disabilities; despite vulnerabilities and local ties, suitable in-borough accommodation within LHA limits proved impossible.
Cllr Zinkin poses:
“The council is forced to either rely on costly temporary in-borough housing, absorbing a substantial ongoing financial loss, or to find accommodation in an area where housing costs more closely match the available subsidy. The unresolved policy question is where the line should be drawn between paying for the family to stay in the borough and moving them to a new area.”
This creates prolonged uncertainty, diverting resources from homelessness prevention amid potential legal challenges.
The second case concerns a family of former asylum seekers recently granted UK permission to remain, with complex medical and welfare needs. Upon status grant, Home Office asylum accommodation ends, shifting responsibility to the council. Cllr Zinkin questions:
“However, why should precious local housing be reallocated away from those who have been waiting for years in favour of a family put into the area by the whim of the Home Office placement process?”
Ideally, medical needs might require local retention, but fairness demands scrutiny: “Should the duty to house be an obligation to find housing somewhere in the UK where housing cost and subsidy balance? This would become the statutory housing offer even if the family has to move to a new area as a consequence.” Such cases are commonplace, with Barnet accommodating 77% of refugee households outside the borough, as reported by Grace Howarth, Local Democracy Reporter for Barnet Post.
Cllr Zahra Beg, cabinet member for equalities, noted families feel “completely isolated” when relocated to places like Luton or Watford, disrupting school ties.
Why Does Home Office Policy Exacerbate Local Burdens?
The “randomness of Home Office placement policy compounds the problem,” placing asylum seekers in high-cost areas like Barnet wherever space exists. Post-grant, councils inherit duties and costs; courts may mandate local stays for welfare reasons, converting national issues into local liabilities.
As of February 2025, Barnet housed 1,508 in Home Office hotels, including 272 children, per Barnet Post. Officer Jess Baines-Holmes affirmed all children received school places “remarkably quickly,” earning Ofsted praise, but housing pressures mount once status changes.[ (fetched)] Committee chair Danny Rich urged cabinet lobbying:
“I don’t think it’s unreasonable to ask the cabinet to consider whether or not it needs to make further representations to the Home Office about the implications [of placements].”
Cllr Zinkin argues: “Why should the financial consequences of national asylum and immigration decisions fall on local residents simply because a hotel or hostel happens to be located in their borough?” Barnet’s ‘Borough of Sanctuary’ status and schemes like resettling 166 Afghans since 2021 amplify inflows.
What Broader Pressures Threaten Barnet Council’s Stability?
Temporary accommodation joins adult social care, children’s services, and debt interest as one of
“four horsemen hollowing out local government finance,”
per Cllr Zinkin. Labour administration faces a £55m deficit for 2025/26, seeking Exceptional Financial Support, amid overspends and reserves depletion from over £100m.
Earlier, Barnet Post reported £5.9m projected overspend in housing, largely temporary accommodation. Conservatives, led by Zinkin, criticise Labour’s handling, proposing savings Labour initially rejected.[ (fetched)] Cllr Ross Houston, Labour Deputy Leader, countered:
“Thousands of Barnet families living in temporary accommodation is bad for them, and bad for the council, costing our taxpayers millions. Barnet’s do-nothing Conservatives failed to invest in social housing.”
Universal services suffer: parks, street maintenance squeezed to fund uncontrollable costs. LGA warns: “The Chancellor must use the Budget to undo this immediately… councils can address the housing crisis more effectively.”
Who Bears Responsibility and What Solutions Are Proposed?
Cllr Zinkin asserts: “It is neither fair nor sustainable to cut services used by hundreds of thousands of residents to fund a system for individuals distorted by national policy failure.” Councils challenge Westminster on “unfunded mandates,” potentially via courts.
London Councils demands uprating LHA subsidies to current rents, potentially saving £700m nationally. Government responds:
“We recognise that the demand for temporary accommodation has now reached record highs. That’s why we are investing more than £1 billion in homelessness services.”
Cllr Zinkin concludes:
“The solution must come from Westminster. Temporary accommodation subsidy must reflect real market costs. The full financial consequences of asylum decisions should be met nationally, not downloaded onto a small number of boroughs. Until then, councils are simply trying to remain solvent while financially irresponsible national government writes blank checks against their revenue streams.”
