SPIRALLING costs of temporary accommodation is the “central challenge” facing the city council, a cabinet meeting heard.

Finance chiefs are on red alert over a £48million gap in the budget and “very considerable uncertainty” about local government funding in the future.

Councils are paying out huge sums due to a surge in homelessness applications caused by extortionate private sector rents and the cost of living crisis.

Cllr David Boothroyd said the council finances were “stable in the medium term” only, adding: “This budget has had to approve additional spending of an extent unprecedented on my time on the council as a result of the temporary accommodation crisis. This is a wide problem affecting all London boroughs, that is caused by factors outside the council’s control.”

“Westminster has the capability to cope, but… we cannot let this continue. Our cabinet commitment to buy homes has had an impact. More work is going on to alleviate the spend to find alternative suitable accommodation to replace the more expensive nightly booked units.”

Gerald Almeroth, the council director of finance and resources said he wanted to stress “the volatility of the temporary accommodation cost and position”, and added: “We have worked very hard to come up with a model to manage that. But that still poses a significant risk going forward, there is still a £48million gap. We will be working towards closing that gap.”

Analysis from the Local Government Association has shown how the number of households in temporary accommodation has risen by 89 per cent over the past decade to 104,000 at the end of March 2023, the highest figure since records began in 1998, costing councils at least £1.74billion in 2022/23.

Cllr Paul Fisher, part of a task group looking at the temporary accommodation crisis, said it was “the critical issue for this council.

“It’s something like a £28million pressure this year, a 40 per cent increase over the course of four years in terms of placements we need to find.

“Those demands are unprecedented. We need to increase the cost effective supply of housing that protects the needs and vulnerabilities of residents.”

The meeting heard the council hoped to continue with plans to “reintroduce CCTV”, boost carers’ pay, get the council to net-zero by 2030, fund community aid and food banks, and maintain a pot for families in the cost of living crisis.

Council tax and rents are going up as a result.

After the meeting Conservative leader Paul Swaddle told the Extra: “Labour should not be raising council tax to fund their pet projects. Their focus should be on keeping the tax burden on hard-working families to a minimum. They have said that they can’t freeze council tax, yet Wandsworth has managed to do exactly that. This means Westminster is no longer the lowest council tax and their budget shows there is only more pain to come.”