Homelessness and Social Housing Allocation (Wales) Bill: integrated impact assessment

Context

In October 2023, the Welsh Government published a White Paper on ending homelessness in Wales. A formal consultation period took place between October 2023 and January 2024 and an analysis of consultation responses was published in April 2024. This work and a wide range of stakeholder engagement has led to the development of the Homelessness and Social Housing Allocation (Wales) Bill (the Bill) which aims to ensure that homelessness in Wales is rare, brief and unrepeated.

The aims of the Bill build on the foundations set out in Part 2 of the Housing (Wales) Act 2014 (the 2014 Act), which was instrumental in establishing a homelessness system based on prevention, lowering emphasis on the concept of “testing” for service access, widening accommodation options and fostering cooperation between public services.

Although transformative at the time, the evaluation of the 2014 Act highlighted persistent challenges in delivering key aims related to prevention and repeat homelessness. The Homelessness Monitor for Wales (2021)(1) also points out that since 2014, more people have sought help, but success rates for prevention and relief remain unchanged (2). The existing legislation is now dated and does not provide a sufficient response to the unprecedented increase in current demand and emerging pressures related to homelessness in Wales. The Bill aims to improve the homelessness system so that it can better respond to the pressures faced today, and provide a sustainable, person-centred system which is fit for future need.

How have you applied / will you apply the five ways of working in the Well-being of Future Generations (Wales) Act 2015 to the proposed action, throughout the policy and delivery cycle?

The Bill forms one part of a long-term transformation of the homelessness and housing system in Wales, as set out in the Strategy for Preventing and Ending Homelessness (2019) and the Programme for Government. The reforms will support the Welsh Government’s long term policy aim of Rapid Rehousing (those who are homeless are able to obtain long term housing quickly, increase their own self-sufficiency, and stay housed) and sustain the significant practice change achieved in response to the Coronavirus pandemic
Homelessness is a substantial social injustice which brings significant negative impacts to communities and to individuals. These negative impacts are far reaching and encompass significant economic costs and losses, alongside individual impacts relating to (amongst others) health, education, social services, social justice and criminal justice. There are therefore strong economic and moral arguments to support the introduction of the Bill which is an important tool in meeting the wellbeing goals for a prosperous Wales, a healthier Wales, a more equal Wales and a Wales of cohesive communities.

Long term

Research undertaken to develop the Bill estimates that the total cost of homelessness to the public service was c.£275m in 2023-24, an average cost of £20,000 per household experiencing homelessness (3). Almost half of this cost relates to temporary accommodation. There are also significant incremental costs of homelessness to wider public services estimated as being £64m, or £4,700 per household experiencing homelessness in 2023/2024.

In addition to the financial cost, homelessness has an adverse impact on the health and wellbeing of those who experience it, as well as on earning potential impacted by lack of housing stability. For example, the impact of becoming homeless to health outcomes is equivalent to a monetary value of £12,200 per person, while the loss of earnings could be around £3,300 (4). This personal cost of homelessness is estimated to be over £200m per year. As a result, the total societal cost of homelessness in Wales is estimated to be over £485m per annum. 

Without further action, the cost of homelessness is likely to rise by an average rate of over 3% per year. Over a ten-year period, without intervention, the public sector cost of homelessness could increase by 17% from £275m in 2023-24 to £383m in real terms by 2033-24.

Prevention

The Homelessness system in Wales faces a range of significant challenges, one of which is managing increasing demand. For this reason, the first part of the Bill will re-focus homelessness service delivery on prevention, with a stronger emphasis on early identification and intervention. It will expand access to the homelessness system and target additional support to those who need it most. It will enable a person-centred approach that considers the root causes of homelessness and better address individual support needs and will widen responsibility for this across the Welsh public service. 

Integration

The Welsh Government’s 2019 Ending Homelessness Strategy set out the principle that preventing homelessness is the responsibility of the wider public service and the Homelessness and Social Housing Allocation (Wales) Bill will bring this principle into practice.

People who are homeless, or at risk of becoming so, will routinely encounter a range of public services as they seek to understand and manage their housing situation (5). It is vital each of these services acts to prevent homelessness, either by itself or with partners to help a potential homeless applicant to access housing and homelessness support at an early stage. It is on this basis, and in recognition of the evidenced intersection between homelessness and other social justice issues, that we propose reforms which widen responsibility for identifying and preventing homelessness across the Welsh public service.

These reforms include a new duty on specified public authorities in Wales to “ask and act” in relation to homelessness. These specified public authorities include health and social services. We will also bring forward guidance to support education to assist in the prevention of homelessness. The Bill will also deliver a set of more specific reforms which seek to target prevention activity towards those most at risk of homelessness. These reforms form a crucial part of our corporate parenting agenda, our child first approach to youth justice and our prevention focus in relation to the criminal justice service.

Collaboration and involvement

The introduction of the Bill comes following years of engagement and co-production with stakeholders. This was initiated by the work of the Homelessness Action Group and the publication of our strategy in 2019, informed by our response to a global pandemic and ongoing cost of living crisis and refined by an independent Expert Review Panel. The Bill is based on a strong evidential grounding and has been informed by stakeholder views at every stage.

The Bill sets out a range of provisions for changes to the law to ensure homelessness in Wales is rare, brief and unrepeated; based on recommendations and advice provided to the Welsh Government by an Expert Review Panel, convened to review existing legislation and to provide specific recommendations for reform.

In developing the legislation, we have considered evidence from people with lived experience of homelessness and experts in homelessness practice, policy and research. Throughout every stage of development of this Bill we have sought to ensure inclusion and consideration of under-served communities.

To develop the White Paper on ending homelessness in Wales, we provided funding to a number of organisations to help us engage communities and individuals across the breadth of Wales. We are grateful to Cymorth Cymru, who worked with over 350 people with experience of homelessness, including those living in temporary accommodation, young people, care leavers, survivors of abuse and people in prison.

Furthermore, to ensure the voices and experiences of people who have experienced homelessness alongside experience of one or more protected characteristics informed this work, Tai Pawb were commissioned to undertake focussed engagement with asylum seekers, refugees, disabled people, Black, Asian and Minority Ethnic people, Gypsies, Roma and Travellers, older people and LGBTQ+ people (6).

Working closely with TPAS, we also surveyed over 600 social housing tenants to gain their insight into social housing tenants’ views on the proposed legislation, particularly proposals on allocations and access to social housing. The survey engaged a wide range of respondents; 47% of whom were disabled, 11% were LGBTQ+ and 22% were carers.

This early, focused engagement provided the grounding for the White Paper but also assisted in identifying gaps in our evidence base and the need for further engagement. We sought to address these gaps during the consultation period; we are grateful to:

• the Wales Migration Council who undertook further, detailed engagement with sanctuary seekers in Wales, to enable to us to understand more about the experience of newly granted refugees in Wales;
• End Youth Homelessness Cymru, for detailed engagement with care experienced young people;
• ALMA economics for their research on allocations practice and;
• Dr Nia Rees for her research with dependent children, under the age of sixteen, experiencing homelessness.

Impact

There is an extremely strong evidence base for the Bill, this evidence base is outlined in detail in the reports of the Expert Review Panel and in the White Paper on ending homelessness in Wales and is rooted in the lived experience of homelessness. The analysis of consultation responses outlines the response to the proposed reforms and areas of most significant opposition and agreement.

During the consultation period, over 100 hours of stakeholder engagement took place in every part of Wales, with local authorities, registered social landlords, public service staff, third sector organisations and people with lived experience of homelessness, including those with protected characteristics. 

The principles of the Bill are well supported across all parts of the Welsh Public Service; however, many stakeholders express concern about the deliverability of these principles during a time of significant pressure across homelessness services and when demand for accommodation in Wales outweighs supply.

The Welsh Government recognise that in order to respond appropriately to these concerns a phased approach to implementation will need to be taken and commencement of the Bill will be undertaken via order. We will work with delivery partners to plan implementation that is deliverable and sustainable.

Costs and Savings

The costs of the Homelessness and Social Housing Allocation (Wales) Bill

There are expected to be £15.3m of one-off, transitional and implementation costs associated with the Bill. There will also be recurring implementation costs which will occur every year from the beginning of commencement and thereafter, reflecting the increased requirements on homelessness services due to the reforms. In 2027-28, the ongoing cost is estimated to be £22.9m, rising to £41.7m in 2035-36. Much of these recurring implementation costs relate to increased staffing requirements of local authority homelessness services. 

Over a ten-year period, the reforms are expected to cost £247m in present value terms, with most of this cost falling on local authorities (7).

The benefits of the Homelessness and Social Housing Allocation (Wales) Bill 

If implementation of the Bill is successful in achieving its objectives, it will lead to earlier identification of risk of homelessness and prevent this homelessness from occurring. This will, in turn, reduce the number of people entering into the acute part of the homelessness system and therefore the associated costs of temporary accommodation, case management and the wellbeing and employment impacts on the individual. For those for whom homelessness cannot be avoided, the Bill aims to reduce the period in which people experiencing homelessness are rehoused into settled accommodation, resulting in reduced costs associated with temporary accommodation and case management. 

As with all legislation, the effectiveness of the Bill will rely on strong implementation. However, based on a scenario-based approach where the reforms increase prevention rates by 10% and increase the share of homeless people successfully relieved from homelessness by 10%, the number of people experiencing homelessness in Wales in 2031-32 (when the full benefits of the reforms are expected to be realised) would fall from approximately 18,000 to 14,000 households and this would translate into a 22% reduction in the cost of homelessness of by 2031-32, excluding implementation costs (8). 

Given that individuals experiencing homelessness are more likely to experience worse health outcomes than those that are not homeless, there are also wider societal benefits if homelessness prevention and relief is improved. Based on the 10% scenario, it is estimated that the reforms will result in approximately 700 years of additional healthy life (0.16 years per person), equivalent to £53m in monetary terms. There are also expected to be £14m of additional earnings through the increased provision of stable accommodation.

Value for money of the reforms

The implementation of the reforms is expected to cost £247m in present value terms up to 2035-36. If the reforms achieve a 10% shift in the prevention and relief of homelessness, this cost will be outweighed by the present value of financial benefits of £481m. This suggests that the reforms will generate net financial benefits of £235m over ten years resulting in a benefit-cost ratio of 2, which means that every £1 invested in the homelessness reforms will generate £2 of benefits. If the non-financial health and earning benefits are also included, then £703m of net societal benefits will be achieved, which means for every £1 spent, the reforms will generate almost £4 of societal benefits resulting in a benefit-cost ratio of 3.9.

The draft Regulatory Impact Assessment (RIA) sets out more detail on the costs and benefits of the Homelessness and Social Housing Allocation (Wales) Bill.

Mechanism

Primary legislation is necessary to achieve the Bill’s aims.

(1) Evaluation of Homelessness Legislation (Part 2 of the Housing Act (Wales) 2014): final report | GOV.WALES

(2) Fitzpatrick, S., Pawson, H., Bramley, G., Young, G., Watts, B. & Wood, J. (2021) The Homelessness Monitor: Wales 2021. London: Crisis

(3) Welsh Government, local authorities and wider public sector

(4) Note, these outcomes may accrue over several years

(5) Homelessness Action Group: report March 2020

(6) Experiences-of-homelessness-Final-Version-PDF.pdf (taipawb.org)

(7) Health values are discounted at 1.5%, non-health values are discounted at 3.5%.

(8) This reduction is largely explained by the improvement in the rate of prevention of homelessness. Improved relievement is also contributing to this reduction in caseload by moving people into settled accommodation faster, however this impact is smaller given relievement activities would not affect how many people present as homeless to begin with.

8.1 How have people most likely to be affected by the proposal been involved in developing it?

The Homelessness and Social Housing Allocation (Wales) Bill (the Bill) is based on recommendations and advice provided to the Welsh Government by an Expert Review Panel. Both the Bill and its supporting documentation have been developed following significant and far-reaching engagement with local authorities, housing associations, the wider public service and the third sector.

To develop the White Paper on ending homelessness in Wales, we have engaged over 350 individuals with experience of homelessness across Wales, including those living in temporary accommodation, young people, care leavers, survivors of abuse, people in prison, asylum seekers, refugees, disabled people, Black, Asian and Minority Ethnic people, Gypsies, Roma and Travellers, older people and LGBTQ+ people. We also surveyed over 600 social housing tenants.

8.2 What are the most significant impacts, positive and negative?

There is broad support for the principles which underpin the Bill and the vision for homelessness as set out in the White Paper on ending homelessness in Wales. However, specific stakeholders have raised specific concerns in relation to some proposals. These concerns relate to possible unintended consequences, the scale and pace of change, the resource required to deliver the Bill and how implementation can be manageable for delivery partners. This feedback has been considered throughout Bill development and we set out below the main significant impacts, our policy intentions and early views on implementation planning.

Prevention 

The Bill will increase prevention activity and a move towards a homelessness system that is trauma informed and person centred. The Bill provides a stronger focus on earlier identification of homelessness, aiming to keep more people in their homes and lowering costs to individuals and the public purse.

Accessibility

With very limited exceptions, anyone who is homeless will be entitled to homelessness assistance and emergency accommodation, opening up the system to more people in need and ensuring consistent treatment across Wales.

Local authorities are concerned by the additional demand they may face as a result of increased accessibility and the unintended consequences of this, including increases in abuse of the system, violence towards staff and rent arrears.

Ministers will have flexibility as to when to implement the reforms to the core homelessness system and this can be aligned with implementation of broader policy. Additional measures are built into the wider Bill to address the concerns of local authorities. 

Shared responsibility, earlier identification and better help

The Bill will ensure that the wider public service in Wales is responsible for the identification of individuals at risk of homelessness, takes the actions they can to assist them and refers them for specialist assistance from the local housing authority.

Targeted prevention

The Bill contains enhanced benefits for those most at risk of homelessness, particularly care leavers.

Making the best use of accommodation supply.

Allocations practice is highly localised, and allocations of social housing differ considerably across Wales, resulting in long stays in temporary accommodation for many vulnerable individuals. The Bill will reform social housing allocation law to make the most effective use of housing supply; relieving pressure on temporary accommodation use and providing local authorities with more ways to accommodate people.
Some stakeholders oppose reform in this area, suggesting that other levers will be more effective in leading to change and urging the protection of the independence of RSLs.

8.3 In light of the impacts identified, how will the proposal:

• maximise contribution to our well-being objectives and the seven well-being goals; and/or,

• avoid, reduce or mitigate any negative impacts?

Systemic inequities including discrimination based on race, gender, and other protected characteristics can perpetuate homelessness, which in turn has a significant negative impact on an individual’s health and wellbeing, which can lead to serious and complex health issues. This complexity can be linked, in many cases, to the pressures associated with poverty and other forms of structural disadvantage. Preventing homelessness reduces health inequalities and improves overall well-being, contributing to the wellbeing goal for a healthier Wales.

The proposals set out in the Bill will promote equality through improving access to housing services, targeting work at those disproportionately experiencing homelessness, improving accessibility and working to mitigate discrimination on any grounds. Addressing homelessness promotes social justice and equality, contributing to the wellbeing goal for a more equal Wales and a Wales of cohesive communities.

Homelessness can have a range of negative and traumatic impacts on an individual. These impacts can have broader community, cultural and linguistic implications, particularly for Welsh speaking communities. Homelessness can lead to displacement, which can disrupt communities where Welsh is predominantly spoken. This displacement can reduce the use of Welsh in daily interactions and weaken community bonds that support the language. The impact is exacerbated further in rural settings where it can be more difficult to access services in language of choice and where there are lower levels of housing supply, particularly in Welsh speaking communities. The Bill will contribute to the wider Welsh Government aim of facilitating and promoting the use of the Welsh language and support the wellbeing goal for a Wales of vibrant culture and thriving Welsh language.

The proposed legislative reform, if implemented appropriately, will improve the identification, prevention and relief of homelessness in Wales. The proposed core reforms to the homelessness system will result in a fairer, more consistent, and inclusive approach to homelessness. The Bill places stronger emphasis on earlier intervention and prevention of homelessness; making provision for local authorities to work with individuals at risk of homelessness earlier, with a greater focus on addressing support needs contributing to homelessness.

The Bill contains a range of proposals to strengthen the prevention of homelessness for those who are disproportionally impacted by homelessness and will ensure local authorities are able to work more closely with partners to coordinate their work for individuals experiencing homelessness alongside other support needs. This will strengthen the support on offer to those who experience homelessness alongside other support needs. This will bring particular benefits for children and young people, care leavers, marginalised communities and vulnerable individuals. When homelessness is prevented, an individual is more likely to contribute to the economy through employment and spending, fostering economic growth and reducing poverty, contributing to our wellbeing goal for a prosperous Wales.

8.4 How will the impact of the proposal be monitored and evaluated as it progresses and when it concludes?

The Welsh Government already collects homelessness data from local authorities and publishes this in varying formats, including monthly and annual reports. As the Bill is refined we will redesign the data collection process to reflect the amended legislation and new duties.

The Bill contains a commitment to periodically report on the use and condition of interim accommodation, and these reviews will inform ongoing reform in relation to accommodation suitability and provide stronger data on the demography of temporary accommodation use. Implementation of the Bill will be supported by the ongoing development of individual case level data in relation to homelessness which will provide significant improvements to homelessness data quality.

The Bill will be commenced using a phased approach and implemented over time. The Welsh Government will work with delivery partners to align implementation with increasing housing supply and local housing authority capacity.

We are committed to long term assessment of the legislation and will commission an independent evaluation through open competition at the appropriate time.