The government has announced what it claims is the largest-ever investment in homelessness prevention services.

Nearly £1 billion is being pumped into council budgets to tackle homelessness, while more resources will be available for workers on the frontline who provide essential services to get rough sleepers off the street and into secure housing as well as seeing more homeless families out of temporary accommodation, the government says.

Deputy Prime Minister and Secretary of State for Housing, Angela Rayner said: “Too many people have been failed by the system time and again.160,000 children face spending this Christmas without a stable place to call home. I am determined to break the cycle of spiralling homelessness and get back on track to ending it for good.

“This largest-ever investment marks a turning point, giving councils the tools they need to act quickly and put in place support for people to tackle, reduce and prevent homelessness. It’s time to turn the tide.

“This historic funding comes alongside our work developing a cross-government strategy back on track to end homelessness, pulling every lever of the state, to ensure that we deliver not just sticking plasters but a long-term plan.

“Through our Plan for Change I am determined to tackle the housing crisis we inherited head on, building the homes we need, delivering the biggest boost in social and affordable housing in a generation and ending no fault evictions.”

Minister for Homelessness Rushanara Ali said: “We have inherited the worst housing crisis in living memory that has left far too many families trapped in temporary accommodation with no end in sight and soaring numbers of people sleeping rough on our streets.

“This is the dire legacy we have inherited as a government, and we are fully determined to take immediate action. Our funding will not only support councils delivering vital services that meet the needs of their communities but also pave the way for our long-term plan to get us back on track to end homelessness once and for all.”

The government says next year’s funding will deliver three important steps in its long-term plan to tackle homelessness:

• Stopping households becoming homeless in the first place
• Addressing the growing use of B&Bs and nightly-let accommodation
• Streamlining funding structures to make it easier for councils to spend their cash.

The full breakdown of new funding includes the following:

• Over £633m for the Homelessness Prevention Grant, a £192m increase from this year, supporting councils to prevent homelessness and provide temporary accommodation where required for families who recently became homeless, for example, through eviction or fleeing domestic violence. This is allocated based on local pressures
• £185.6m for the Rough Sleeping Prevention and Recovery Grant, consolidating the main rough sleeping and single homelessness focused grants into a single pot of money. This means councils can better prioritise when providing warm beds and shelter for people at risk, or experiencing, rough sleeping
• More than £37m for the Rough Sleeping Accommodation Programme, providing ongoing support costs to help rough sleepers into longer term accommodation alongside specialist staff supporting their mental health and substance abuse problems to pave the way for job opportunities
• £58.7m for the Rough Sleeping Drug and Alcohol Treatment Grant to continue supporting evidence-based drug and alcohol treatment as well as providing wrap-around support staff who offer child-focused, family-centred, mental health programmes
• £10m to the Changing Futures Programmes which offers long-term support for adults experiencing multiple disadvantage, including combinations of homelessness, substance misuse, mental health, domestic abuse
• £7.6m for sector support grants that will strengthen the capacity the voluntary sector with more staff, including StreetLink that encourages people to notify their authority if they’ve seen someone sleeping rough and what local services are available to provide immediate help into emergency accommodation
• £5m for emergency accommodation reduction pilots, to work with 20 local councils with the highest use of bed and breakfast accommodation for homeless families to put in place specialised plans to reduce the use of emergency accommodation, including B&Bs.

Local Government Association housing spokesperson Cllr Adam Hug said: “Homelessness is one the biggest and most urgent pressures facing councils as more and more people are turning to their local council for support. A record number of households are in temporary accommodation – this represents a personal tragedy for each one, as well as a significant cost for councils struggling to source temporary accommodation.

“Preventing people from becoming homeless in the first place is both humane and cost-effective. The new funding announced today will be a great help to councils as they seek to end homelessness, and will help to relieve some of the financial burden they are under.

“We look forward to collaborating with the Government as they develop their cross-government homelessness strategy. To be most effective, this will need to set out national commitments from each government department, monitor and report departments’ contributions, and ensure that local partners contribute to prevention activity and targets through local homelessness strategies.”

Chief Executive of Crisis Matt Downie said: “With homelessness at record levels, we’re delighted to see the government taking action to ensure councils have the necessary funding and the ability to use innovative approaches to tackle this crisis.

“Through our services we see the devastating impact being without a safe home has on people’s health, relationships and life chances. No one should have to spend their nights moving between night buses and no child should grow up in a B&B with nowhere to play or do their homework.

“We look forward to working with the government to deliver a bold and ambitious cross-departmental strategy to end all forms of homelessness, alongside delivering the levels of social homes needed to ensure everyone has a safe place to call home.”

Chief Executive of St Mungo’s, Emma Haddad said: “We welcome the government’s announcement that it will be investing nearly £1 billion funding for councils next year to tackle homelessness and rough sleeping.

“Earlier this year St Mungo’s, working with partner organisations and supporters, called on the government to extend its funding for rough sleeping services. This vital funding had been due to end in March 2025, despite the number of people sleeping rough at a record high.

“We are pleased to be working with the government on developing its new strategy to end homelessness for good. Crucially funding for homelessness and rough sleeping needs to be a long-term commitment to support the delivery of strategic and joined up services, alongside a focus on prevention.”