Causes of Homelessness

Published Date: 23 Mar 2015 Last Modified: 13 Jun 2017

Keywords: homelessness policy, homelessness impact,

Homelessness can significantly impact on the health, welfare and employment prospects of those unfortunate enough to experience it. The life expectancy of rough sleepers is 42 years. Children living in temporary or shared accommodation have their education disrupted and are more likely to suffer from behavioural problems (House of Commons Committee of Public Accounts 2005).

Whilst lack of educational achievement is classed as "disadvantage" in the jobs market, those with no qualifications (who do not suffer from any other form of disadvantage) have a "relatively high" rate of employment. However, where there is additional disadvantage such as homelessness, substance misuse or criminal record these factors combine to depress employment rates. The "client group" approach has been successful in targeting specific groups such as single mothers and the disabled, assisting them to move out of welfare dependency. This approach has been less successful with respect to clients who suffer from multiple disadvantages (Freud 2007).

In 1998, the then Prime Minister pledged to reduce the number of rough sleepers by two-thirds by 2002. Many of those who have made the transition from rough sleeping have done so by using hostels as a first step (Department for Communities and Local Government 2006). However, fundamental to the achievement of successful outcomes with respect to homelessness is to encourage homeless people into "meaningful activity", training and ultimately employment (Office of the Deputy Prime Minister 2005, Department for Communities and Local Government 2006). There is also a recognition that services for the disadvantaged should be "joined-up", which will assist in providing co-ordination to those who face homelessness (Department for Communities and Local Government 2003).

Research indicates that there are two approaches apparent as the most successful with respect to homeless people - those that are "holistic and tailored" (Freud 2007, Butcher et al 2007). This implies addressing all of the problems faced by the individual including employment, health as well as housing. The key benefits of this approach are "sustainable outcomes" and "effectiveness in tackling homelessness and multiple needs" (Butcher et al 2007).

However, the homeless face significant issues relating to training and employment. This review seeks to examine the key issues with respect to homeless people and their ability to access training and employment opportunities. This is fundamental as employment is considered one of the primary pathways addressing social exclusion and leading to financial independence (Lownsbrough 2005, Sodha and Grant 2010).

Homelessness

Legally, the law classes a person as homeless if they do not have the legal right to occupy any living accommodation, or the accommodation they occupy is not suitable or habitable. Many regard homelessness as rough sleeping but this disguises other forms of homelessness such as those living in temporary accommodation, bed & breakfast, hostels etc. (Shelter 2007).

The obligations on local authorities are included in the Housing Act 1996, which was amended by the Homelessness Act 2002. This places a duty on local authorities to house people who fit the homelessness criteria. However, not everyone defined as "homeless" will be entitled to accommodation. To qualify for housing under the homelessness legislation an applicant must meet eligibility criteria, be legally defined as homeless, be in priority need and not have become intentionally homeless. Whilst a person may have a serious housing need, if they do not fulfil the criteria, the local authority does not have a duty to house them (Shelter 2007).

It is difficult to quantify numbers of homeless people due to the extent of "hidden homelessness". In addition there are those who experience "episodes of homelessness" between more stable periods (Shelter 2007). Opinion Leader Research (2006) found that the majority of homeless were in a cycle of repeated episodes of homelessness and this was related to debt problems, drug and alcohol dependency and the nature of hostel accommodation i.e. "noisy, violent, costly".

"Daytime homelessness" has also been identified (Jones and Pleace 2005). Originally used in the USA, the term refers to the situation where hostel dwellers are ejected from their accommodation during the day so whilst they may have over-night accommodation, the lack of a home during the day results in "daytime homelessness".

Causes

The causes of homelessness are many and varied, but generally fall into the categories of "structural factors" (unemployment, poverty, lack of suitable housing, the extent of legal rights, social trends, benefits issues and policy development such as the closure of long-stay institutions) and "personal factors" (drug / alcohol misuse, problems at school, debts, physical and mental health issues, family breakdown, leaving the care system or armed forces) (Shelter 2007, Butcher et al 2007).

A "spiral" or "chain of events" could also lead to homelessness. An event such as a family breakdown leads to loss of home or family support, which triggers a response such as substance misuse, loss of self-esteem and motivation (Butcher et al 2007).

There are also a series of "risk factors" or indicators that confront the homeless or potentially homeless (Jones and Pleace 2005). These are:

"school exclusion and lack of qualifications; time in local authority care; multiple needs: combined mental health drug / alcohol problems; contact with the criminal justice system; time in the armed forces; previous experience of homelessness; lack of a social support network; difficulties in furnishing or maintaining a home; debts, especially rent or mortgage arrears; causing nuisance to neighbours (often linked to multiple needs)".

Impact

Homelessness is traumatic. In addition, many have suffered a trauma leading homelessness such as home repossession, drug and alcohol misuse, domestic violence etc. Homelessness can lead to "disempowerment, isolation and poverty". Homeless people rely on benefits and this in-turn can lead to dependency due to the high rents payable in supported housing such as hostels (Shelter 2007). Evidence suggests that homeless people will remain in supported housing such as hostels for some time, impacting on their attempts to re-enter "the mainstream" (Singh 2005).

The reliance on benefits due to the high rents in temporary accommodation has a significant impact on a homeless person's ability to get a job and move on. As income rises Housing and Benefit and Council Tax Benefit are reduced. If a homeless person manages to find a job, they may be no better of as their benefits are reduced accordingly. When travel and other costs related to working is accounted for the homeless person may be no better off (Shelter 2007) - this is examined in greater detail below.

Young homeless people face a struggle in the transition to adult life (Foyer Federation 2001). They face issues such as poverty, lack of qualifications, family encouragement and self-esteem.

Those who were homeless and those providing services have often referred to a "homelessness culture" (Crisis 2005), but this was in fact a reference to the most damaging aspect of many homeless people's former way of life i.e. drug and alcohol dependency.

The importance of Life Skills

Many authors have examined and highlighted the value of life skills in tackling homelessness and social exclusion (Foyer Federation 2001, Department for Communities and Local Government 2003, Parsons and Palmer 2004, Lownsbrough 2005, Lownsbrough et al 2005, Singh 2005, Department for Communities and Local Government 2006, Opinion Leader Research 2006, Whitehead 2006, New Economics Foundation 2008, Quilgars et al 2008). However, Jones and Pleace (2005) suggest that research from as far back as the 1980s indicates that there are more complex issues leading to the risk of homelessness, rather than just a lack of life skills. They cite Jones et al (2001) assertion that life skills training is carried out with homeless people because it is "accepted practice" rather than because of an evidence base related to its efficacy.

Employers and those in education are paying increasing attention to "skills" rather than just "knowledge". This relates to how someone might react to a particular situation rather than how much they know. The work environment is increasingly focussed on "key skills", "learning skills" and "life skills". This focus has coincided with a similar debate about the acquisition of life skills to tackle social exclusion and address welfare reform. Life skills are recognised as being essential for people to managing their lives and relationships. They are also vital with respect to finding and sustaining a job (Lownsbrough et al 2005).

There is an "underlying assumption" of a correlation between lack of life skills and being part of a socially excluded group. This raises two important questions; do people become excluded as a result of poor life skills? Or are life skills "forgotten" as a result of social exclusion and dealing with the challenging circumstances that exclusion throws-up? Whilst there is no evidence to suggest a causal link there is an interaction, which means "families can spend generations trying to escape" (from exclusion) (Lownsbrough et al 2005).

Life skills are the activities that relate to daily living such as washing, cleaning and managing a household budget together with the "soft" skills such as communication that allow individuals to form and manage relationships.

Singh (2005) found that some homeless people's lack of life skills meant they were not able to access services and behavioural "norms" such as punctuality were not developed.

Acquiring and maintaining life skills has been found to act as a "gateway" to more formal training in the same skill, which has ultimately led to employment. There are a number of examples where learning basic cookery skills have stimulated an interest in undertaking technical training and subsequent employment in catering (Lownsbrough 2005).

When a person becomes excluded for a particular reason, the issue defines them in society and they are offered services that aim to alleviate the issue that has caused the exclusion, such as the provision of hot meals, clean clothing etc. They are then offered services that enable them to overcome the exclusion such as training, job search etc. Life skills training can provide a vital bridge between these services (Lownsbrough et al 2005). Whilst for some, undertaking formal training will ultimately lead to independence; others may need to acquire more basis skills in the short term. Homeless people generally need a wide range of training from formal education to support with respect to "support services including general life skills, psychological support, social skills, financial management, basic skills and job related skills" (Opinion Leader Research 2006).

Meaningful Activity

Lack of motivation is a common issue among homeless people (Jones and Pleace 2005, Singh 2005, Centrepoint 2006, OSW 2007, New Economics Foundation 2008). However, participating in meaningful activity is seen as a way of engaging the socially excluded and disadvantaged in activity that, whilst not actually concerning education, job-search etc, incorporates activities that teach those involved about teamwork, social skills etc., which are useful in the jobs market. Activities can be volunteering, art-based activity (theatre, painting, photography) or those involving health such as Tai Chi. Engaging with the homeless via the use of meaningful activity can provide a gateway into more formal training and job search and has been found to have an impact on social issues such as self-esteem and the ability to form and maintain relationships (Jones and Pleace 2005, Department of Innovation, Universities and Skills 2009).

Meaningful activity around arts based projects also has a number of advantages such as the opportunity to be creative. In addition, there are no "entry requirements" or "skills requirements" so participants feel less "exposed" and can progress at their own speed. It also affords the opportunity of allowing the person to "express and reflect what has happened to them" (Cameron et al 2003).

Government Policy relating to Work

The government has made good progress in its Welfare to Work agenda and the creation of New Deal and Jobcentre plus has been instrumental in achieving this success. However, the government needs to build on its achievements so far to ensure that the most disadvantaged in society are also given opportunities to move from benefits dependency, but this should recognise that they may have special needs which need to be addressed in a holistic way (Freud 2007).

As a result of improved economic prosperity, government "has transformed work and opportunity in Britain. The goal of full employment matters because work provides the opportunity for development, progression and financial independence (Department for Work and Pensions 2007a).

Government's intention is to create the circumstances whereby people move from being "spectators to becoming participants, actively seeking and preparing for work " (Department for Work and Pensions 2007b). There are five key elements that will be used to achieve the aim of full employment:

• A stronger framework of rights and responsibilities to move benefit claimants from being passive recipients to being active jobseekers
• A personalised and responsive approach will empower advisers and give increased discretion to Jobcentre Plus staff
• Partnership - the public, private and third sectors working together on the basis of what works best
• Targeting areas of high worklessness by devolving and empowering communities
• Not just jobs, but jobs that pay and offer opportunities for progression

There are also plans to improve support and provide work incentives in conjunction with a benefits system that rewards responsibility together with a greater choice over the support that is provided (Green Paper - Department for Work and Pensions 2008a). The intention is to:

Simplify benefits with the result that there will be two payments, Employment and Support Allowance (ESA) for those with a condition that prevents working and Job Seeker's Allowance (JSA) for those actively seeking work.

Ensure that there is a no right to "life on benefits".

Disregard child maintenance payments when calculating entitlement.

The subsequent White Paper (Department for Work and Pensions 2008b) sets out a programme to implement proposals with respect to changing the benefits system, improving job search services, adding conditionality to benefits entitlement, providing and defining additional support and ending child poverty.

In January 2009, the Welfare Reform Act 2009 translated into statute the foregoing policy and discussion documents, aiming to increase the employment rate to 80%, end child-poverty, offer tailored support to job-seekers and place conditionality on benefits entitlements.

There are a number of initiatives that are aimed at helping to move homeless people into work (Crisis 2007). These are:

Pathways to Work: Aimed at supporting those claiming Incapacity Benefit to make the transition into work. This is particularly relevant to the homeless as circa 70% of homeless people claim this benefit (Crisis 2007).

The New Deal / Flexible New Deal: Offering counselling and guidance, training and education. In 2004, the initiative was adapted to make it more suitable to the homeless (Department for Work and Pensions 2004). However, as eligibility is restricted to those in receipt of Job Seekers Allowance for at least six consecutive months, this may prove to be a barrier to the homeless as their lifestyles often result in gaps in claims (Crisis 2007).

Jobcentre Plus: 2006 saw the opening of a centre in London devoted to working with the homeless and this coincided with a national commitment to prioritise the needs of the homeless (crisis 2007).

"progress2work" and the "progress2work-LinkUP": These pilot schemes recognise that disadvantaged clients need more time together with specialist interventions from statutory and other agencies to make lasting impact on employment outcomes. The target system used to measure Jobcentre Plus and others recognises that there are some clients that may require specialist, long-term assistance (Department for Work and Pensions 2004). However, there is concern over the ability of the model to justify its existence over the three-year term before the committed funding runs out (Crisis 2007).

New Deal and Flexible New Deal together with Jobcentre Plus have proved effective - assisting circa 90% back into work within twelve months. Prior to the recession Job Seeker's Allowance claim levels were the lowest for thirty years. Unemployment levels during the recession were at lower rates than predicted by the government (Sodha and Grant 2010).

Whilst the "welfare-to-work" programme has undoubtedly had assisted in creating a population of "more skilled, educated and active", the homeless continue to face exclusion and run the risk of suffering more disadvantage (Sodha and Grant 2010).

Homelessness and Work

In 1986 83% of homeless people were in some form of paid employment but by 2005 this figure had dropped to 5% and by 2007 only 4% were in work (St Mungo's 2005 and 2007). Singh (2005) found that 77% of those surveyed wanted to work. 97% of hostel residents would like to work (St Mungo's 2007) and a 2010 survey conducted by St Mungo's revealed that "80% agreed with the statement one of my goals is to get back into work". Research has reliably indicated that rates of employment among young homeless people are very low and that they face a combination of significant barriers that impact on their educational achievement and employment potential (Centrepoint 2006).

" worklessness lies at the root of deprivation" (Meadows 2008). Employment is one of the "key routes" toward addressing social exclusion and achieving independence, both socially and financially (Lownsbrough 2005, Sodha and Grant 2010). However, "financial rewards" are not the singular motivation for the homeless wanting to find work (New Economics Foundation 2008).

Barriers

Homeless people face a range of issues, which form barriers to their progression from benefits into training, work and independence. These barriers are "person-related" and "systemic" or "structural".

Person-related barriers include:

• Lack of skills (including life-skills) and / or qualifications
• Low motivation
• Lack of confidence and self-esteem
• Poor job search skills
• Lack of work experience
• Health, both physical and mental
• Addictions
• Cultural / language barriers
• Fear of change and the unknown
• Low respect for / mistrust of "authority"
• Criminal record
• The structural / systematic barriers include:
• Living in concentrations of worklessness
• Living in social housing / hostels and the stigma attached
• Poor local transport
• Limited local job opportunities
• High cost of hostel rents
• Poor financial incentives and the "benefits trap"
• Lack of ongoing support
• Discrimination

(Parsons and Palmer 2004, Jones & Pleace 2005, Lownsbrough 2005, Singh 2005, Centrpoint 2006, Opinion Leader Research 2006, Butcher et al 2007, New Economic Foundation 2008, Sodha & Grant 2010, Business Action on Homelessness 2009)

37% of homeless people have no formal qualifications whilst 13% have Level 3 qualifications (more than 1 A Level) or above. This compares to just fewer than 50% of the general population (New Economic Foundation 2008).

In addition, many suffer barriers relating to "competing issues" (Singh 2005, Jones & Pleace 2005). Competing issues arise where a pressing need such as dealing with addiction prevents the person addressing the issue of finding work. Singh (2005) cites "Maslow's Hierarchy of Needs" model, which suggests that fundamental needs such as finding a home take precedence in the hierarchy over, for example, addressing issues around self-esteem.

"Lower level" barriers include lack of suitable clothing to attend an interview, inadequate access to a telephone or computer and the lack of somewhere suitable to complete an application (Parsons and Palmer 2005, Singh 2005).

Pathway to Employment

The "traditional" pathway to employment model employed by the homelessness sector is a three-stage process where the first "engagement" stage is centred on addressing the issues that led to homelessness such as treatment for substance misuse. In the second stage of "pre-work support" the process is about attempting to get clients work-ready and can include volunteering, job-search, training, work placements etc, which will hopefully result in a job offer. The last stage involves "in-work support" which can take the form of job-coaching and at-work training (New Economics Foundation 2008).

However, a revised model should be used that more readily reflects the journey into employment (New Economics Foundation 2008). The new model highlights the need for "intensive support" during the first twelve weeks of employment, as this is the period when homeless people "struggle financially, emotionally and practically". The model is based on four key stages i.e. "Engagement, Pre-work support, Settling into work, Sustainable employment". Whilst this new model represents a "linear" path to employment it may need to be modified to reflect the reality that a person with high support needs may drop out at any stage. So if a person drops out at the "Settling into work" phase, this may result in further work on the "Pre-work" or even "Engagement" phases (New Economics Foundation 2008).

Butcher et al (2007) reported a seven-stage "journey to employability" comprising "engagement, needs assessment, individual action plan, support, and labour market preparation, in work support, sustainable employment". The content of this seven-stage route shares many similarities with the revised model above. Fothergill (2008) develops the model to create "The Right Deal for Homeless People" to prove a "holistic" and "co-ordinated" range of support to assist the homeless into work and independence.

Meadows (2008) indicated that homeless people come from a range of backgrounds with different needs relating to education, health (both physical and mental), contact with the justice system etc. The most effective interventions with respect to homeless people and their pathway to employment are those that address the needs of the individual, which may involve interventions via referrals to specialist agencies.

As a result of the Places of Change programme (Department of Communities and Local Government 2006), St Mungo's instituted a five-stage "Pathways to Employment" programme, beginning with an "Occupational Health Check" which then proceeds with activities such as basic skills training, vocational guidance, long-term meaningful activity, external accredited training, job search, coaching and end with in-work support. Clients are also provided with suitable clothing to attend interviews. (St Mungo's 2007). Evaluation of this programme noted the project " having a significant impact on participants lives. The journey towards increasing independence and employment has begun for participating clients." The programme can achieve significant outcomes but interpretation of outcomes must recognise the progress that clients can realistically make (Sodha and Grant 2010).

The "Ready for Work" programme under the auspices of Business Action on Homelessness (BAOH) targets those who may be ready for work but lack skills, confidence or are long-term unemployed. In a two-week work placement they are allocated a "buddy", together with support from BAOH trained staff for six months following the placement. Since its inception 2000 out of 5000 people have found work and of the participants 38% go on to full time work. 500 businesses are involved and they report the "valuable contribution" that the homeless can make" (Sodha and Grant 2010).

There is scope to employ homeless people in the homelessness field (Ireland 2010). Circa 20% of the staff within Thames Reach, Tyneside Cyrenians and P3 are former service users. There are 17,000 employed in the sector and if all organisations employed "service users" at this 20% rate, this would realise some 3,400 positions. Although there is no single pathway model, the similarities of each organisations approach are a lead from senior management, incorporating the model into business planning and ensuring staff buy-in. Staff who are former service users display a "high level of commitment" to the job, other service users and are able to use their experience to benefit their case-load. There are a number of benefits in employing service users:

• Beneficial impact on culture
• Credibility and influence with policy makers
• Adding value to service delivery as a result of the experience of staff (Ireland 2010)

Sustaining employment can be a particular issue with respect to the homeless and reasons for not being able to sustain work include transport, "not being mentally ready" and difficulties with integration into the workforce. This reinforces the need for tailored "one-to-one" support during the early stages of employment (Singh 2005, Sodha and Grant 2010).

In addition to facing problems "fitting in" (Business Action on Homelessness 2009) in the initial stages of employment, there are other issues which can prove significant in determining whether a homeless person is able to sustain the new job. They are "poor financial planning", which relates to the transition from benefits, particularly where the person's income is cost neutral or where they are only slightly better off, "the effect of temporary, casual contracts" as the benefits system is not geared up to address this type of work and "social isolation" particularly where the move into employment is accompanied by a move from a hostel into more permanent accommodation, resulting in less or no contact with existing social networks.

Barriers to sustaining employment also include drug / alcohol dependency, "emotional" problems, particularly during tense or stressful periods and the likelihood was that the job would be low skilled and low-paid resulting in little job satisfaction (Opinion Leader Research 2006).

Meadows (2008) also highlighted the need to work with young homeless and disadvantaged people to develop a "work-focussed" lifestyle can assist in tackling other areas of disadvantage.

Benefits System

Generally referred to as the "benefits trap", this situation occurs when the reduction in benefits as a result of having a job means that the person is marginally, or no better off. When questioned, however 56% of homeless individual stated they would take a job in these circumstances whilst 21% would take other issues into account before coming to a decision (Singh 2005).

Many people find that they are no better off in work:

Taking into account the costs of work (travel or work-related clothing, for example) a JSA claimant over the age of 25 faces a "participation tax rate" exceeding 100% for most of the first 20 hours of work (and just below 100% for the hours after. As a result, the individual gains only £29.06 after 40 hours of work (Sodha and Grant 2010).

Caseworkers, clients and experts in the field of homelessness find that the tax and benefits system is confusing. The benefits system plays a fundamental role in the transition from benefits dependency into work, but the perception is that the system operates as a "bureaucratic function" that militates against "support into work". These difficulties result in people not claiming entitlements, particularly with respect to in-work, benefits and tapering payments. There is also the concern amongst claimants that benefits entitlements have been calculated incorrectly, resulting in claw-back at a later date. The system of Working Tax credits has also resulted in some being worse off after following a recalculation of entitlement after 12 months in work (New Economics Foundation 2008).

Bearing in mind that many homeless people are already in debt, poor transitional arrangements resulted in many taking on more debts, thereby increasing the likelihood of a further episode of homelessness. This difficult experience in moving into work reduces the motivation to "try again" (New Economics Foundation 2008). Difficult benefits to work transitions can result in a four-week period between benefits concluding and the arrival of the first pay-slip (Sodha and Grant 2010).

Workless people are not "well informed" about the availability of Working Tax Credit, Housing Benefit, Childcare Tax Credit and additional forms of support. The complex inter-relationships of these benefits together with family circumstances, earnings and location mean that the system has a limited role to play in encouraging the transition to work (Meadows 2008, Sodha and Grant 2010, Business Action on Homelessness 2009).

There is also a perception amongst homeless people that working will not make them better off, particularly as the jobs they could apply for are low skilled and low paid. There is also evidence that pressure from government agencies to take work has driven many to forego benefits in favour of begging or part time casual work (Opinion Leader Research 2006).

The system of benefits is "poorly structured", particularly with respect to sign-on days so there is evidence of those on "Ready to Work" placements having to take days off in order to avoid loosing benefits payments. The complex nature of Housing Benefit recalculations makes it problematic for those on variable hours or short-term contracts (Business Action on Homelessness 2009).

Attitudes of Employers

In a survey of fifteen employers, all thought that "commercial and non-commercial" employers had a duty to help socially disadvantaged people such as the homeless. Employers consider that "Corporate Social Responsibility" at a local level is particularly important as it affords them the opportunity of "putting something back". Although most employers had recruitment policies, they tended to be influenced by equal opportunities legislation rather than addressing the needs of disadvantaged groups such as the homeless (Singh 2005).

Involving employers can be complex as they are "likely to be resistant to anything that is time consuming and does not have clear outcomes". However, good relationships with employers can provide opportunities for work placements and the potential to have an effect on recruitment policies (Meadows 2008).

Of those organisations that offered work placements to homeless people, they suggested a number of benefits to the organisation:

• Improved understanding of the issues.
• Challenge to existing policies within the organisation.
• Utilisation of "untapped skills".
• Seeing first hand someone "reclaiming their lives, dignity and self-respect".
• The negative aspects were reported as:
• Some candidates not being "work-ready".

Although some displayed characteristics such as time-keeping and good attitude, they lacked the "relevant skills" for the position so as a result, "struggled to cope".

Workplace behavioural norms such as punctuality were lacking in some individuals (Singh 2005).

A survey by Nacro relating to recruiter's attitudes found that three quarters rated appearance, education and references as important. OSWs database indicates that just over a quarter of homeless people had no relevant qualifications. It also unlikely that homeless people would have direct access to references or suitable clothing (Singh 2005).

The perception amongst homeless people is that employers will discriminate against them because of their homelessness (Lownsbrough 2005, Singh 2005, Opinion Leader Research 2006)

The Cost of Homelessness and Unemployment

In addition to the personal cost that homelessness has on the person, there are a number of financial costs including failed tenancies, addiction and other health issues resulting in increased contact with the NHS, involvement with the criminal justice system together with long-term benefits claims and reduced economic activity (Homeless Link 2010).

Total Spending

In 2005 it was estimated that government spent £1 billion on homelessness. This related to direct costs such as support and accommodation but excluded indirect costs such as health (Homeless Link 2010).

In 2009, government investigated the financial benefits of the "Supporting People" programme and reported net financial benefits of £3.41 billion on an overall investment of £1.61 billion. The costs included indirect costs including health, social services etc (Homeless Link 2010).

Sodha and Grant (2010) cite research carried out by St Mungo's in 2007, which was able to demonstrate that by assisting 125 homeless people into sustainable work can produce savings of £5.6 million i.e. £45,000 per person per year.

Spend per Person

A number of studies have attempted to assess the net cost to the exchequer of homelessness. However, the estimation techniques fall behind other sectors such as health. Studies address the direct costs of agencies that provide additional services to the homeless such as day centre services, drug rehabilitation, criminal justice, temporary accommodation etc. Three studies were carried out in 2003, 2008 and 2009. The annual costs per person per year were £24,500, £26,000 and £24,350 respectively (Homeless Link 2010).

Cost Benefit Analysis

In common with estimating the spend per person, the methodology for estimating the costs and benefits of homelessness and work projects falls behind areas such as transport and health. Homeless Link (2010) cite a number of studies, which have found that:

OSW's four-year Transitional Spaces Project produced a saving of £2,840 per person after project costs.

The Emmaus Community model of accommodation with attached community enterprise where "companions" were employed, saved the exchequer £31,000 per person.

OSW calculated that it cost £29,000 to accommodate an unemployed person in a hostel. If that person had been in work, the saving would have been £27,000. per annum.

The Tyneside Cyrenians' Self Build Project employed unemployed homeless people to re-build a hostel. In the five years prior, costs to the exchequer relating to the participants were £513,779. The reduction in offending, improvement in health and reduced addictions presented a saving of 89% following training, support and employment.

With respect to employing service users, Thames Reach found that the cost of the training programme was £23,000 but this was offset by a reduction in service delivery costs of £88,000 per annum and a reduction in recruitment costs of £6,000 (Ireland 2010).

Conclusion and Recommendations

A review of the literature has indicated that homeless people are one of the most disadvantaged groups in society. Not only do they face disadvantage from not having a permanent home, they also face problems relating to health, skill levels and education, social exclusion and unemployment.

Evidence suggests that one of the key pathways to address social exclusion is by obtaining paid employment. However, many people face a number of barriers that prevent them moving into work.

Due to the diverse range of needs, homeless people may need to access a range of services before they are "work ready" (Singh 2005). The key to supporting the homeless into employment should be the recognition that they face a number of barriers including "a lack of basic skills, a lack of self-confidence, poor physical and mental health" and "lack of access to adequate housing" (Sodha and Grant 2010).

Therefore, authorities that commission back to work programmes need to recognise this and not be driven by "hard outcomes" (Singh 2005, Sodha and Grant 2010). Homeless people should be allowed to take part in voluntary "welfare to work" schemes without the threat of benefits withdrawal (Business Action on Homelessness 2009).

The current system of "welfare to work" needs to recognise that homeless people are a "long distance" from work and need considerable support to ease the transition into work. A two-step approach should recognise:

The need to provide support for homeless people to achieve basic life skills

Only when these skills have been achieved can further job skills training, job search, work placements etc be undertaken

Many homeless people are not receiving the holistic services that they require so it is recommended that benefits claimants are given a "basic capability assessment" to ascertain whether they are "job ready". People not meeting this test would be referred to a specialist to commission the support that they need. In this way, clients requiring "intensive support" would receive it before moving on to the Flexible New Deal (Sodha and Grant 2010).

The homelessness sector needs to build relationships with the private sector. This will this address the stigma that currently exists and may help to remove the discrimination against homeless people (Singh 2005). In addition, companies should offer flexible salary arrangements for new starters together with "work buddies" to support homeless people in their first weeks at work (Business Action on Homelessness 2009).

There should also be recognition of the risk that companies take in employing a homeless person with a "mixed track record". The third sector could work with the private sector to address these concerns. A dedicated fund could be initially endowed by large companies, subsequently "topped up" by beneficiaries. The fund would provide insurance to cover any losses to a company in employing a homeless person (Lownsbrough 2005).

Many homeless people recognise the value of a job but are caught in a "peculiar paradox" i.e. they need to address the most pressing issue in their lives (finding a home) before thinking about employment (Singh 2005).

The high cost of rents in temporary accommodation and the reliance on housing benefit to pay for the rent means that many homeless people cannot afford to take up work. Funding mechanisms for hostel accommodation need to be restructured so that the individual pays less, assisting the transition into work. The administration of Housing Benefit should be improved. "Vulnerable people should not be made even more vulnerable due to fears about Housing Benefit" (Singh 2005).

Reforms to the tax and benefit system are required to make the advantages of working clear. The "earnings disregard" is currently £5 for a single person. This should be increased to £60 to provide a real incentive to sustain a job (Sodha and Grant 2010).

On the basis that each "ready to work" homeless person costs the exchequer £26,000 in benefits payments, there is an economic argument to consider introducing a monetary incentive to encourage people into work. A payment of £20,000 which would taper over a four year period has the potential to achieve a saving of £1.7 billion over a for year period (Business Action on Homelessness 2009).