London councils spend £114m a month on temporary accommodation

The LGA said: “We do not underestimate the difficult decisions you will have to take in your first Budget, but stabilising the local government sector financially will not only protect key services, it will also provide a return on investment to the tax-payer, while improving outcomes for the people and places councils serve.”

The Budget, the first from the Labour government elected in July, will be delivered on Wednesday.

Analysis from the independent think tank Institute for Government, external says the Budget, which will set firm spending plans for next financial year, is the first time the government “will be forced to choose between services that are all crying out for more funding”.

The IFG predicts that “the criminal justice system and local government will be particularly concerned, as high demand and financial fragility respectively mean that low settlements will make it incredibly hard to improve performance”.

A Ministry for Housing, Communities and Local Government spokesperson said councils already receive funding to help meet the cost of temporary accommodation, but the government “will provide them with more stability through multi-year funding settlements”.

“The Deputy Prime Minister is taking action to tackle homelessness with ministers across government through a dedicated Inter-Ministerial Group where they will develop a long-term strategy to get us back on track to ending homelessness,” it added.