Unprecedented demand for temporary accommodation is causing “potentially unsustainable financial pressure” for homelessness services in Northern Ireland, according to a report from the NI Audit Office.

In 2023-2024, about 4,700 households were in temporary accommodation, compared to 1,700 in 2017.

Dealing with the temporary accommodation demand cost the Northern Ireland Housing Executive (NIHE) almost £39m in 2023-24.

A lack of suitable, permanent social housing was found to be impacting the NIHE’s ability to tackle homelessness effectively, the report added.

The report, issued on Tuesday, considers how the landscape around homelessness services has changed since 2017.

Comptroller and Auditor General Dorinnia Carville said that dealing with these issues was “complex” and acknowledged efforts made by the NIHE and those working in the sector under “challenging circumstances”.

NIHE Chief Executive Grainia Long said the organisation will “take steps to implement any changes that can improve our service”.

A spokesperson for the Department for Communities (DfC) said the department “will take time” to consider the report’s findings.

It shows that while the number of households presenting and being accepted as homeless has been relatively stable, the costs of tackling homelessness have soared.

The cost of providing temporary accommodation represented more than half of all NIHE spending on homelessness services in 2023-24.

While the majority of this was on self-contained, single let accommodation, the NIHE spent more than £12m on hotels and B&Bs last year, compared with around £7.5m in 2022-23 and £0.9m in 2018-19.

The increase in temporary accommodation has also hindered the NIHE’s efforts to prioritise homelessness prevention measures, the report found.

A small proportion of NIHE spending, around £4.5m in 2023-24, is directed at preventing homelessness, despite this being at the heart of its Homelessness Strategy.

The report also outlines the impact of a lack of suitable, permanent social housing on the NIHE’s ability to tackle homelessness effectively.

The NIHE has identified a need for almost 25,000 new social houses between 2023 and 2028, but current rates of funding and capacity issues mean that new starts are falling considerably below the level required.

Since 2017 the number of homeless households on the social housing waiting list has increased by 81%, with 12,000 of these households having been on the waiting list for more than four years.

Many of these households rely on temporary accommodation while they wait for a permanent home.

Ms Carville said the demand for homelessness services, in particular temporary accommodation, had been impacted by “an inadequate supply of social housing, the impact of Covid-19 and the cost-of-living crisis”.

She emphasised that homelessness has “long term consequences for health and education outcomes”, while “the costs to the public purse are significant and rising”.

She said there is a need “to reduce spending on hotels and B&Bs, and for an increased focus on homelessness prevention and the supply of new social housing”.

“Until these key issues are resolved, demand for homelessness services is likely to continue to escalate to a point where it may become financially unsustainable.”

The NIHE welcomed the report and said it will carefully consider its recommendations.

Ms Long said “ongoing, increased demand for temporary accommodation” has been seen since the Covid-19 pandemic.

“The report notes the areas where the Housing Executive and our partners have continued to provide services despite unprecedented demand and acknowledges the efforts being made by us and those working in the sector under challenging circumstances,” she said.

Ms Long said the NIHE will “carefully consider” the report’s recommendations and continue to work with the DfC to increase temporary accommodation and social housing provision.

On the Interdepartmental Homelessness Action Plan, the report found examples of “effective cross-departmental working” to be “scarce” and has recommended NIHE and DfC work with other departments, and the community and voluntary sector, to “identify best practice”.

A DfC spokesperson said the department “will take time to consider its findings and recommendations”.

“This report recognises the complexity of the issue of homelessness,” the spokesperson said.

“It also acknowledges the considerable effort and substantial investment which goes towards addressing this problem.”

Nicola McCrudden, chief executive of Homeless Connect, the representative body for the homelessness sector, said that the report’s finding came as “no surprise” to those working in homelessness services.

She said the report highlighted the need to rebalance spending away from reactive spending on non-standard emergency type accommodation, towards proactive spending to prevent homelessness in the first place.

“B&B and hotels should only be used as a last resort and where possible people experiencing homelessness should be placed appropriately in temporary accommodation best suited to their needs.”

Ms McCrudden added that a multi-faceted issue like homelessness cannot be responded to on short-term budget timescales.

“We need a multi-year budget rebalanced towards homelessness prevention.”

People Before Profit MLA Gerry Carroll said the report shows that “in reality, plenty of money is available to tackle homelessness; but the vast majority of it is being funnelled into the pockets of private landlords, hotels and B&Bs”.

He added that the current “firefighting” approach to addressing homelessness is both “unsustainable and unconscionable”.

“The executive must invest in permanent social housing and the prevention of homelessness, and immediately stop throwing good public money after bad,” he added.