Illegal use of B&Bs to house homeless soars by 800%

The use of bed and breakfasts to house homeless families beyond the legal time limit has risen by 800% since the coalition took office – with a third of the country's councils unlawfully placing adults and children in B&Bs for more than six weeks, new figures reveal.

An analysis shows that local authorities across England are now spending on average up to £650 a week to keep people off the streets. Freedom of information requests by Labour to 325 councils, to which 242 responded, reveal that 125 had resorted to placing destitute families in hotel rooms for six weeks or more since April 2010. This figure challenges claims by ministers that only a "small number" of town halls put families in bed and breakfast accommodation beyond the legal limit.

Charities and councils say a combination of welfare cuts and lack of affordable housing has led to the almost ninefold increase. The latest figures show 900 adults and children had been housed in B&Bs for a month and a half at a time, often sharing a single room without a kitchen or any meaningful storage space.

Guest houses and hotels are meant to be a short-term solution while families wait for council accommodation, and local authorities are flouting the law when they families stay for more than six weeks. Such decisions are subject to judicial review.

These emergency measures are expensive for the taxpayer. Councils are spending in some cases more than a thousand pounds a week to house people in hotels.

Tory-run Wellingborough spent £1,961 in one week for a family. Lib Dem-controlled Eastleigh spent £1,932 for a family with seven children for a seven-day stay. Labour's North East Derbyshire district council shelled out almost £700 for a week. Tory-run Dartford said it spent £616 for one week for a family of five. However, the family stayed there for almost eight months, an apparent cost of £21,355 to taxpayers.

Of the 125 local authorities that placed homeless families in hotels for more than six weeks, more than half (54%) were Tory-run. About a third (35) were Labour. The problem is most acute in London, where there is no spare council housing and private rents are soaring. The result is that many local authorities are subsidising private hotels.

Last week it emerged that the Tory flagship borough of Westminster is spending almost £85,000 a week housing families in 10 West End hotels, with more than £22,500 a week paid to the Central Park Hotel, two minutes' walk from Hyde Park, and more than £17,000 a week to the Copthorne Tara Hotel in Kensington. Labour pointed out that this would work out at almost £4.5m a year. The Guardian spoke to one mother of three who was placed for nine weeks in four different hotels and bed and breakfasts last year after her husband's building business collapsed. Westminster council was paying almost £1,000 a week to house her family inside the borough and in Lambeth, south London.

"We had a big five-bedroom house in Maida Vale. I have three children and we were put up in one room. My kids were going to school north of the river and we were put south of it. My eldest had exams so we had to send him to my mother's.

"There's no place to cook, no fridge, no Wi-Fi, no washing machine, no place to put our things. The whole place ends up smelling."

She said she blamed both the local authority for not having enough council housing and "greedy landlords who think nothing of asking for £1,500 a week in rent". Her family ended up on a council estate after three months of being moved around. "We are grateful, obviously, for the support but the conditions here are awful. Damp and cramped. They obviously don't want to help."

Jack Dromey, Labour's shadow housing minister, whose staff collated the survey, said it was "an absolute disgrace that on this government's watch there has been an 800% increase in families with children and pregnant women living in bed and breakfasts for months on end.

"The government's housing and economic policies are failing and families with children are paying the price. Affordable house building has collapsed, rents are soaring and their ill-thought-through benefit changes are driving up homelessness.

"But the government's policies are not just causing desperate hardship for those affected, they're costing taxpayers millions of pounds every week."

In London, town halls warn that the lack of cheap rented homes is becoming a crisis. London Councils, which represents the 32 local authorities in the capital, warned in a policy paper last week that by 2020 the city would be short of 221,700 homes for the poor and has called on ministers to offer tax breaks to landlords prepared to offer affordable housing.

It said: "The increased use of bed and breakfast is a secondary symptom of the lack of appropriate affordable housing supply in London … The supply of temporary accommodation in the private rented sector is dropping dramatically. In the last 18 months there has been an estimated reduction of 20% in the number of homes boroughs are able to access."

The Department for Communities and Local Government (DCLG) said its new Localism Act would mean that anyone accepted as unintentionally homeless by a council cannot now refuse to live in a private flat – one of the reasons, it said, why families end up for so long in B&Bs while they wait for suitable housing to be found.

There are concerns that this new power will be used to shift the poor to cheaper areas outside London. In a paper to council officers last November, Andy Gale, a housing expert paid by the government to advise on homelessness, gave details to local authorities on how to ensure out-of-borough placements in private rented accommodation can be framed to avoid legal challenge.

The DCLG told the Guardian: "The number of households in B&B accommodation in England was 4,350 at 30 September 2012 … [but] the number of families in B&B accommodation for more than six weeks in England was 880."

The housing minister, Mark Prisk, said in December that he had called in councils with high numbers of homeless families in B&Bs to demand action to "address this unacceptable situation".

He said: "There is absolutely no excuse for any family to be stuck in bed and breakfast accommodation, and the law is clear that families should only be placed in this temporary accommodation in an emergency and only then for no more than six weeks. It is also a waste of taxpayers' money to be paying such large sums to house families in unsuitable accommodation.

"Where families do have to be housed in bed and breakfast, it should be a short-term measure whilst suitable accommodation is found. We have invested £470m funding to ensure we continue to have some of the strongest protections in the world against homelessness, which has helped ensure that levels remain lower than for 28 of the last 30 years."