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3 days ago
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Councils in England are paying millions to relocation companies to help them permanently move homeless families out of big cities and the south-east in a practice that has been called a “national scandal”.
A Guardian analysis of local government spending data shows that councils in the UK’s two biggest cities, London and Birmingham, and more than a dozen local authorities across the south-east of England have given more than £5.2m to firms that facilitate moves to cheaper parts of the country since 2020.
The companies find cheap homes in areas where rents and local housing allowance (LHA), the amount those claiming housing benefit can claim towards rent, align. Rents in much of the country have not kept pace with LHA, meaning these properties are often located in smaller, deprived towns in the Midlands and north of England.
People relocated using these firms are discharged into the private rented sector and are deemed permanently rehoused. Usually, any connection with the original council ends, making it near impossible for them to return home.
In London, families living in costly temporary accommodation, which is paid for by councils, are sometimes given only 24 hours by councils to accept the offer of a new home in another part of the country and are told they will be kicked out of emergency housing if they refuse.
Experts raised concerns about what they called “social cleansing” and “racialised, coercive displacement”, where people of colour are moved to largely white areas where they know nobody. MPs in the north-east said people were being relocated to already very deprived communities with no additional support provided.
Among the companies being paid by councils to help relocate tenants are Reloc8 UK. Local authorities in London and Birmingham city council have paid the firm at least £3m since 2020. More than 40% of this amount has been paid in the past year.
The use of these firms appears to have increased year on year, with a sharp rise in payments by councils in 2023 and 2024, when homelessness across England increased dramatically. When taking account of all the firms identified by the Guardian, 30% of the £5.2m sum has been paid in the past year alone.
Reloc8 UK said it had procured homes in London and Birmingham over the years but said “there are times when certain areas are more prevalent due to availability, affordability for tenants and many other factors”.
Reloc8 UK also provides transport and removal services for relocated families as well as basic household furniture and appliances. The firm said that, at a minimum, it provides families with a brand new cooker, fridge-freezer and beds, the costs of which are paid back by councils.
The sums paid to Reloc8 UK also include incentive payments to landlords to encourage them to accept low-income tenants.
Reloc8 UK said it could not comment on individual councils’ policies, but many families had used its services to move on a voluntary basis. The firm also said councils saved about £20,000 per family over a two-year period compared with if they had remained in temporary accommodation.
London councils have made the heaviest use of these firms, paying them almost £4.8m since 2020. Waltham Forest council , alone has paid Reloc8 UK more than £900,000 since 2020.
Enfield council has paid Reloc8 UK more than £600,000 since last August alone. A report recently found Enfield was the London local authority sending families the furthest from their jobs, schools and support networks. The council has said that most of the households to which it provides temporary accommodation will end up moving out of the borough and often away from the south-east of England.
The movement of homeless families, who are disproportionately from ethnic minority backgrounds in England, into towns that are largely white, has raised concerns. Dr Shabna Begum, the chief executive of the Runnymede Trust, called the practice “racialised, coercive displacement” and said it was a “shameful indictment of our broken housing system”.
She said: “We know that people of colour are much more likely to experience homelessness and are therefore more exposed to this practice of enforced displacement out of our cities. We are talking about working-class communities of colour being forced to move out of areas which they know as home – to areas where many have reported feeling isolated, vulnerable and exposed to racism.”
“There is a disproportionate racialised impact and this should be a national scandal.”
Councils have called on the government to raise LHA rates annually, which they say would relieve the huge pressures on homelessness services, stem soaring temporary accommodation costs and prevent “last resort” out-of area-discharges. Ministers have announced LHA rates will remain frozen until 2026.
Durham county council, the largest local authority in north-east England, said homeless people from London were being moved to the area without their knowledge. The Northern Echo reported in October that at least 24 households were privately discharged to the city last year, with some families reportedly sent up with little more than a key and an address.
Mounting outcry by MPs in the region prompted the deputy prime minister, Angela Rayner, to warn councils last month against surprise relocations, reminding them of their “legal responsibilities”.
Mary Kelly Foy, the MP for the City of Durham, said: “It’s beyond belief that managing agents are making money from what appears to be little more than social cleansing. Not only is it desperately unfair on families that are being dropped in to areas with no ongoing support in place, it’s shameful that no additional support is being provided to the communities in which they being placed, often already battling extreme poverty and deprivation.”
Grahame Morris, the MP for nearby Easington, said: “Offering families the option to move to areas like County Durham is one thing; forcing them to relocate under the threat of homelessness is quite another. This practice is no longer a rare exception but a matter of routine. When these councils neglect their duty, it falls to community groups and charities in my constituency to pick up the pieces.”
Since 2010, councils’ funding from central government has fallen by 46%. This has coincided with a decrease in social housing stock, a lack of affordable private housing and a sharp rise in homelessness in many parts of the country. These challenges are particularly acute in London.
Between 2013 and 2023, the number of social housing homes owned by local authorities and housing associations in England fell by more tha 250,000. In October, a study by Savills found that only 5% of homes in London were in line with LHA. In July, the National Audit Office (NAO) found that homelessness had hit its highest levels since records began. Councils in London are collectively spending about £4m a day on temporary accommodation.
Waltham Forest and Enfield councils said private sector discharges were done in line with local policies and processes and that housing supply in their areas outstripped demand, meaning they were forced to look beyond their boroughs and the capital for accommodation.
Birmingham city council said it had used Reloc8 and another firm to help 27 families secure homes in the city and beyond, adding that moves out of the city were done only with households’ participation and agreement.
