Young people leaving care who were given a one-off £2,000 cash lump sum, with no strings attached, were more likely to be in stable housing and less likely to be ‘sofa surfing’ than their peers, a pioneering study has found. These young people were also happier, had stronger relationships and were less likely to stay overnight in hospital, the findings showed.

This is the first UK trial to test the impact of unconditional cash transfers on homelessness with a sample large enough to draw quantifiable conclusions. It was commissioned by the Centre for Homelessness Impact, conducted by researchers at the Policy Institute, King’s College London, and funded by the UK Government’s Evaluation Accelerator Fund.

Previous research shows that people with experience of the care system are disproportionately affected by homelessness. Around one in ten people sleeping rough in London have been in care, and more than a quarter of young people leaving care report having sofa surfed.

In this trial, 99 young people leaving local authority care in nine areas in England received a one-off, unconditional £2,000 payment from June 2023. Their outcomes were tracked at six and 12 months and compared with those of 200 similar care leavers who did not receive the payment.

Researchers found participants who received the money were 8 percentage points more likely than those who did not to say their housing was stable six months later. There was also a 6.6 percentage point drop in ‘sofa surfing’ after six months among care leavers given £2,000, although after one year this effect had diminished, with this group 3.3 percentage points less likely to have sofa surfed.

Put another way, this is equivalent to eight more care leavers out of every 100 having stable housing, and six or seven fewer sofa surfing out of every 100, although the effect declined over time.

They also found that between two and four fewer care leavers out of every 100 experienced an eviction linked to anti-social behaviour over the study period after receiving cash, though the difference was small.

Care leavers who received the £2,000 reported slightly better wellbeing over time compared to the control group - equivalent to between three and five more out of every 100 saying they felt optimistic for the future, useful, interested in others and able to deal with problems well a year after the payment. The differences were smaller earlier on.

Young people who got the money were initially more likely to engage with preventative health services such as seeing a GP or attending a drop-in clinic and less likely to stay overnight in hospital, although this effect reduced over time. Overall, there were 17 fewer overnight stays in hospital among the group who received the cash sum. Social workers were required to inform researchers if any participants in the trial experienced adverse outcomes and none were reported.

When asked by researchers how they had used the money, recipients said they initially spent more on bills and transport costs. After one year, participants’ additional spending on bills had dropped back to only slightly more, whereas they were spending slightly less on transport. Young people who received the cash transfer consistently reported, however, that they spent 12% less on alcohol, tobacco or drugs than they had previously. 

The nine local authorities involved in the trial were Birmingham, Bolton, Camden, Rochdale, Salford, Stockport, Walsall, Warrington, and Warwickshire. Research was conducted in partnership with case workers, social workers and other officers in these councils. 

A care leaver, who received £2,000 as part of the study, said: ‘At first, I couldn’t believe it…It helped me get through my master’s without stressing me out. I feel like a lot of other people would get that kind of extra help from their families but for care leavers, it’s a bit more difficult. It’s not as black and white. You have to figure things out on your own sometimes.’

Michael Sanders, Director of the Experimental Government Team in the Policy Institute, King’s College London, said: ‘The findings from the trial are encouraging, with consistent positive effects on participants’ housing stability, wellbeing, social connectedness, contact with health services and other outcomes we measured.

‘Effects on some housing outcomes appear to shrink over time, which suggests that a one-off transfer of this amount may be insufficient to have durable effects on housing outcomes. But even so, these results highlight the potential benefits of conditional cash transfers, which are not only easier and cheaper to administer than other types of interventions, but also allow recipients more agency and dignity, recognising they themselves are usually best placed to make decisions about their lives.’ 

Dr Ligia Teixeira, Chief Executive of the Centre for Homelessness Impact, said: ‘Cash transfers have a strong evidence base internationally as a simple tool for preventing harms from poverty. We are excited to have the first results from rigorous causal research to test their effectiveness in preventing homelessness.

‘Policy-makers and local authority leaders should consider direct financial support for young people leaving care, with no strings attached, as a policy tool and a practical way of helping their transition to independent living.’

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