Across the United Kingdom, local councils are sounding the alarm over mounting financial pressures, with homelessness and social care costs spiraling beyond control. Two recent reports—one from Glasgow and another from Barking and Dagenham—paint a sobering picture of the challenges facing local governments as they struggle to balance their books while meeting the needs of their most vulnerable residents.
In Glasgow, council leader Susan Aitken did not mince words when she addressed the city’s looming homelessness crisis on August 21, 2025. She squarely placed the blame on UK asylum policy, which she says is driving up costs and stretching local resources to breaking point. According to the latest forecasts, Glasgow could be staring down a staggering £66 million homelessness bill in 2026/27, with an overspend of £43 million already projected for homelessness services in the current year.
“This is very challenging, there are people out there who would seek to exploit this and indeed are. We can see it happening in our communities right in front of us,” Cllr Aitken said in remarks reported by Glasgow Live. But she was quick to clarify the root of the problem: “It is not asylum seekers and refugees that are the cause of this problem. It is around policy and the lack of funding that flows to local government to assist us to deal with the consequences of policies that have been implemented elsewhere, specifically in Westminster.”
The numbers are stark: 44% of all homeless presentations in Glasgow now come from refugee households. The city’s homelessness services, already under pressure, have been further strained by a Home Office decision to accelerate the processing of asylum claims. Asylum seekers who are granted leave to remain are given just 56 days to vacate Home Office accommodation and secure their own housing—often turning to local councils like Glasgow for urgent help.
Glasgow’s situation is further complicated by its unique responsibilities under Scottish law. In Scotland, all unintentionally homeless households are entitled to settled accommodation, a broader guarantee than in England, where councils are only required to house those in “priority need” such as families with children or vulnerable individuals. This policy, while compassionate, adds to the city’s financial burden.
Adding to the complexity, 12.4% of Glasgow’s annual homelessness demand now comes from households granted leave to remain elsewhere in the UK who have chosen to relocate to the city. The cumulative effect has been overwhelming. In November 2023, the city declared a housing emergency, with council chiefs acknowledging that the crisis had been “exacerbated” by national policy changes.
Robert Emmott, Glasgow’s finance director, summed up the challenge: demand for housing is rising faster than “the time it takes us to find permanent homes for people.” The council’s financial outlook for the next two years is grim, with a potential spending gap of nearly £110 million looming between 2025 and 2027.
In response, Glasgow’s councillors have called for more funding and long-term investment from both the Scottish and UK Governments. Some have even suggested pausing the dispersal of asylum seekers to Glasgow and halting the requirement to house applicants from outside Scotland. According to a council report, such measures could cut estimated homelessness costs to £36 million in 2025/26 and just £13 million in 2026/27.
Cllr Jon Molyneux, co-leader of the Glasgow Greens, described the financial forecast as “sober reading” and urged the UK Government to “step up to the plate” with solutions and funding. Yet he also acknowledged that the city itself could do more: “We were in frequent breach of unsuitable accommodation orders over a number of years prior to covid. I still think as a city we’ve maybe not addressed those structural issues in homelessness sufficiently in advance of having to deal with this additional pressure.”
Susanne Millar, the council’s chief executive, highlighted the ongoing collaboration with the Home Office, noting “daily” discussions and a clear briefing on the situation. She pointed out that about 94% of asylum seekers in Scotland are accommodated in Glasgow, and while other councils are making “huge efforts” to support people, “in general people make the decision at the point when they get a positive decision to travel to Glasgow.”
Meanwhile, the financial strain is not confined to Scotland. In Barking and Dagenham, a borough in East London, council leaders are grappling with their own budget crisis. On August 19, 2025, the council revealed a projected budget shortfall of £12.6 million for the upcoming 2026/27 financial year—a gap expected to widen to £16.8 million by 2028/29 if current trends continue.
The pressures driving these deficits are all too familiar: rising demand and costs for social care, special educational needs, temporary accommodation, and even fly-tipping. Inflation, currently at 3.8%, is pushing up the cost of delivering services, especially in adult and children’s care and private sector rents. A proposed 3.2% pay increase for council staff, negotiated nationally, is also higher than the council had budgeted for.
“Extra funding for us looks likely based upon our significant deprivation, population growth, need and, as I keep saying, demand,” council leader Dominic Twomey told Asian Standard. But he warned that bridging the gap “will not be easy to finance.” Twomey emphasized the need for “robust financial discipline to ensure every pound spend is done so efficiently and affectively with minimum if any waste.”
Labour councillor Maureen Worby, who oversees housing, told cabinet members she expects the council will need to spend even more on temporary accommodation as homelessness rises. Like Glasgow, Barking and Dagenham is legally obligated to house vulnerable people facing homelessness, and the cost of renting accommodation for homeless families continues to climb.
The council’s own report acknowledged the tough choices ahead, stating: “Balancing short-term pressures with long-term priorities means focusing on what matters most to communities, finding new ways to deliver services more efficiently, and building financial resilience in the face of continued uncertainty.”
Despite these daunting challenges, the Barking and Dagenham cabinet was told the council expects to finish the current year with an almost-balanced budget. Still, the warning bells are ringing loudly for the years ahead.
As councils across the UK confront rising homelessness, growing social care needs, and the relentless squeeze of inflation, the debate over funding and responsibility is intensifying. Local leaders are calling for more support from national governments, but also acknowledging the need for internal reforms and tough decisions. The road ahead promises to be anything but easy, and the stakes—for the most vulnerable residents—couldn’t be higher.
