This article was originally posted in Inside Housing.

On 28 October, John Healey will deliver his first Budget as chancellor. Just over eight weeks later comes another deadline the government has set itself: by Christmas, everyone sleeping rough who needs it should have been offered a route off the streets.

Some of the biggest spending decisions affecting homelessness have already been made through last year’s Spending Review, so the interesting question for this Budget is not whether another large sum appears under that heading. It is whether the wider changes being made to public finances begin to alter a more fundamental imbalance: once crisis arrives, much expenditure becomes unavoidable, while spending that might prevent the next crisis often is not.  

People sleeping rough are not a fixed population just waiting to be housed. They arrive, leave and return, sometimes from parts of the government that knew about them before a homelessness service did.

For example, a prison release date is known and the person is already in contact with public services, yet expenditure intended to secure a better housing outcome before release has to be identified and justified. If homelessness follows, the later costs can appear separately in probation, housing, health and welfare.

Each part of the government may be making a perfectly defensible decision while the combined result is expensive.

The deeper problem is that crisis has first call on money. Once a family needs temporary accommodation, or somebody sleeping rough requires an immediate response, the government cannot simply decide the bill is too high and walk away; need is present and, in many cases, statutory duties apply.

Earlier expenditure is different. Tenancy sustainment, a better transition from prison or help before another foreseeable crisis can be postponed, rationed or confined to a time-limited programme. That creates a ratchet in the wrong direction: as crisis costs rise, they consume more of the capacity that might have reduced future demand.

In 2024-25, £3.7bn was spent on homelessness in England, £2.8bn of it on temporary accommodation. Spending on B&B and nightly paid accommodation doubled in a single year, from £309m to £620m.

None of this means every intervention labelled ‘prevention’ will save money. Some will release cash, others will avoid future expenditure or improve outcomes without shrinking a budget, and some will fail.

It is striking that the Treasury’s own appraisal rules already recognise the distinction. The 2026 Green Book tells officials to look beyond the organisation originating a proposal, consider costs and benefits over its lifetime, and assess wider social value alongside the impact on public finances.

The harder problem is turning that logic into spending decisions when the cost of acting is visibly in one budget today, while much of the benefit may appear in another budget years later.

Better budgeting is only part of the answer. The 2025 Spending Review committed £39bn over 10 years to the successor of the Affordable Homes Programme, alongside investment in better-value temporary accommodation and earlier homelessness intervention. Those choices matter, because no amount of joining up of budgets can manufacture an affordable home.

Some routes into homelessness reflect public services failing to act together; others reflect the simpler problem that suitable housing is unavailable or unaffordable. A serious prevention strategy has to know which problem it is trying to solve.

It is the first of those problems – responsibility and spending divided across different parts of government – that Britain has repeatedly struggled to crack. Total Place began testing a different approach in 2009, asking what changed when services and money were organised around people and places, rather than the departments paying for them. This approach is about working across organisational boundaries.

When Greg Hurst, Nick Davies and I looked at homelessness with the Institute for Government thinktank last year, we argued that it was worth returning to the idea. Our A smarter approach to homelessness report proposed testing a Total Place-style model of combined funding in a small number of areas, because homelessness cannot sensibly be prevented by homelessness services alone when many of the risks that bring people there arise elsewhere in government.

Just over a year later, something close to that proposal is being tested. The government’s five place-based pilots ask mayoral strategic authorities to pool budgets, align governance and redesign services around defined groups of people; the programme explicitly builds on Total Place.

None of the pilots is about homelessness. That makes the next question unusually concrete: why not use the next phase to test the model on a route into homelessness that the government can see coming?

Prison release would be a good place to start, not because every instance of homelessness after release is preventable, nor because we know the perfect intervention, but because the transition is known in advance, several public services are already involved and the consequences of failure fall across several budgets.

A place could map what housing, probation, health and other services spend before and after release, agree the outcome it is trying to achieve, give those involved enough freedom over the relevant resources to act earlier, and track outcomes and costs.

If a different approach reduces homelessness but costs more overall, we should know that; if it avoids later expenditure or releases cash, we should know that too.

The aim is not one enormous homelessness budget, but decisions that make sense for the government as a whole, rather than for each budget in isolation. Place-based budgets now offer a practical way to find out whether that can work.

They will not answer every prevention question. Sometimes the problem is not fragmented responsibility, but genuine uncertainty about what will work. That is closer to an R&D problem: the government needs enough continuity to develop promising approaches, implement them properly, evaluate their effects and economics, stop what fails and give stronger ones a route into mainstream funding.

Fragmented responsibility requires shared ownership; uncertainty requires disciplined learning. Treating both simply as a shortage of prevention funding risks another generation of short pilots without changing how mainstream budgets are spent.

Fiscal devolution could give places more freedom to do this, but it also raises a question about who carries the risk. Mr Healey has said the Budget will include greater business-rate retention and, from 2028, a share of locally raised income tax for mayoral strategic authorities. Greater freedom to prevent costly demand could be powerful; leaving places to carry more of the bill when homelessness rises because of housing markets, welfare policy or other pressures they cannot control would be something rather different.

Christmas, meanwhile, is only one moment in a system that is constantly moving. The government’s data framework asks whether rough sleeping is becoming rare, brief and non-recurring, and the June figures show why: almost a third of those recorded sleeping rough were new to the streets and 14% were returning. Helping people off the streets this winter matters enormously, but lasting progress depends just as much on changing what happens to the people who would otherwise arrive afterwards.

The Spending Review has already put substantial resources into homes and homelessness services. The harder question for October is whether the rest of the government can take responsibility earlier, before homelessness appears on a homelessness budget. Place-based budgets now offer a practical way to test that proposition, starting with a route into homelessness that the government can already see coming.

If they can move money and responsibility to the point before crisis, and establish whether doing so really improves outcomes and value for money, that would matter more than another prevention fund. It would change the point at which the government decides it has to act.

Ligia Teixeira, Chief Executive, Centre for Homelessness Impact

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