When things started to spiral in 2018, Leigh Midwinter was living in a council flat in Stroud. It was about an hour’s drive away from the town in Oxfordshire where he grew up, and where his ex-wife lived with their two children. He’d moved to Stroud for work, but a combination of stress and being away from his usual support networks exacerbated longstanding mental health issues. As his depression intensified, Midwinter spent time on a psychiatric ward. After being discharged, he returned to work, but was struggling financially, and missed a rent payment of around £700. He got back on track for subsequent payments but couldn’t repay the missed month. The council took him to court to pursue it. Midwinter became liable for the court costs. What had started as £700 was now over £2,000 of debt. With no way of paying, Midwinter was evicted. “It started the whole chain of homelessness,” he says. “I just lost hope.”
Homelessness in the UK is soaring: an estimated 300,000 households lack secure accommodation. This is an increase of over 30 per cent since 2010, when the Conservative-led government slashed welfare spending. Since then, a chronic shortage of social housing and soaring private rents have combined with a much-diminished social safety net, including a freeze on housing benefits, to push more people into homelessness.
Rough sleepers are the most visible group, but they make up only a small proportion of the whole; it is estimated that on any given night, just 3,000 people are sleeping rough in England (though this is still a 73 per cent increase since 2010). The vast majority are “hidden homeless”, meaning they are sofa-surfing or in temporary accommodation, often a room in a rundown B&B paid for by the local authority. This is supposed to be an emergency stopgap, but people frequently end up stuck for years given the lack of affordable housing to move on to. It is at best miserable and at worst traumatic. It is also extremely expensive. Temporary accommodation for one person costs local authorities approximately £14,000 to £18,000 for a single year. Collectively, councils in England are paying £1.7bn a year for temporary homes.
After being evicted, Midwinter was placed in a multiple-occupancy house in the Tredworth area of Gloucester. He ended up staying there for three long and distressing years, costing the council tens of thousands of pounds—all to recoup a rent payment of around £700. This is a common story, versions of which play out around the country every single day. What if there was another way? It runs counter to the current government approach of scaling back financial support, but there is a growing body of evidence for a very simple solution to homelessness: giving people money.
The idea of using cash handouts to ease poverty has long been controversial, as was evident in Margaret Thatcher’s offhand comment in the 1970s that poverty is a “personality defect”, caused by people who “don’t know how to budget”. The notion that poor people are irresponsible and will misspend has been baked into British politics ever since. At the 1992 Conservative party conference, then social security secretary Peter Lilley gave a notorious speech on welfare reform in which he promised to close down “the something for nothing society” and stop “subsidising scroungers”. Tony Blair’s Labour party approached the issue cautiously—on the one hand, implementing policies to ease poverty among children and pensioners in particular, but on the other, continuing harsh rhetoric about “scroungers” and “conditionality”, promising “a hand-up, not a hand-out”. David Cameron’s coalition government, as it implemented devastating cuts to the welfare budget, contrasted “strivers” and “skivers”. The language is even more extreme when it comes to homelessness. In 2003, London-based homelessness charity Thames Reach launched a campaign called “your kindness could kill”, which encouraged people not to give money to people begging. The message was enthusiastically taken up by others, with posters displayed by Suffolk police in 2015 asking: “Could you spare 20p for a cup of tea? How about £10 for a bag of heroin? £12 for a rock of crack?” Today, Transport for London plays messages telling Underground passengers: “There are beggars and buskers operating on this train. Please do not encourage their presence by supporting them.” All of this creates a pervasive sense that giving money to homeless people will only worsen their situation.
The crucial problem of homelessness is not a moral failing, but a lack of cash
But for many people—including Midwinter, who had no way of getting the £700 to clear his rent arrears—the crucial problem is not a moral failing, but a lack of cash. Although it is not a panacea, there is clear evidence that giving people money can help them out of homelessness or prevent it altogether. “People talk about the ‘homelessness pathway’ but I don’t see a pathway, I see dead ends,” says Jonathan Tan, chief executive of a small charity called Greater Change, which gives out cash grants to individuals in a few areas in southern England. “Different barriers trap people in place, and sometimes some upfront material support can help them overcome those barriers. It’s radical simplicity: give people the money, and they’ll get on with it.”
Cash transfers, sometimes known as “direct giving”, have most often been used in the context of international development. GiveDirectly, a non-profit that allows donors to send money straight to “the world’s poorest households” in countries such as Uganda and Bangladesh, is one of the best-known proponents of this model. A 2013 study of an unconditional cash transfer programme administered by GiveDirectly found that giving people cash, and only cash—no training, no instructions about what to spend it on—led to dramatic increases in sustained income, assets, psychological wellbeing, food consumption and female empowerment among the extremely poor. The average amount that people received was US $513. This study showed that providing cash -without conditions attached can have a significant impact on the lives of people living in poverty. Reviewing a number of studies in 2016, the Overseas Development Institute concluded that: “There is strong evidence that cash transfers are associated with reductions in monetary poverty.”
Until recently, the idea has not gained traction as a way to tackle homelessness and poverty within western countries. But that is starting to change. In August 2023, the Canadian charity Foundations for Social Change published a peer-reviewed study in partnership with the University of British Columbia. The project identified 50 people in the Vancouver area who had become homeless in the preceding two years, and gave each a one-off payment of $7,500. The participants could do whatever they wanted with the cash. “Our value is that people know what’s best for themselves,” says Heather Hay, director of community and projects at Foundations for Social Change.
For a year, researchers checked in with recipients to see what they were spending the money on and what was happening in their lives. Their outcomes were compared to a control group of 65 homeless people who didn’t get any cash. Both groups attended coaching on developing life skills and plans. The results were stark: those who had received the lump sum moved into stable housing faster and were able to maintain financial security. They increased their spending on rent, food and clothing, not—as stereotypes might suggest—on “temptation goods” like alcohol, drugs and cigarettes. (Separately, the research team conducted a survey of 1,100 people in the US, asking them to predict how the recipients of a $7,500 cash transfer would spend it. They predicted, wrongly, that unhoused people would spend more on temptation goods than those with homes.) The spending choices people made varied wildly. One woman was pregnant and had a toddler. “She was in a difficult domestic violence situation here in Vancouver and defaulted to the street and had nowhere to go,” says Hay. She used the money for plane tickets back to her home province of Saskatchewan. “Now she’s living a robust life with familial support. The cash really was a lifesaver for her.”
The study had limitations: the sample size was small, and it focused on people who had recently become homeless, excluding those with the most serious mental health or substance abuse problems. “We focused on the hidden homeless, who make up 80 per cent of the homeless population,” says Hay. “Potentially I think giving anybody cash directly can enable them to move into housing and get the security that they need—but that’s not what we were looking at.”
Foundations for Social Change is conducting a larger-scale study to see if the results can be replicated. But the results it has seen already support the findings of international studies of cash transfers—essentially, that it is a highly effective intervention. In addition to the positive outcomes for individuals, the study found that cash transfers saved the government money, even taking into account the initial cost of giving out cash. “We don’t dump a lot of money here in Canada into prevention,” says Hay. “What we’re trying to figure out is where can we intervene early on in order to prevent people from defaulting to the street, so they can just get on with their lives.”
Midwinter’s three years stranded in temporary accommodation were dark. He was afraid of the other occupants and spent a lot of time in his room. Scared to use the communal kitchen, he ate convenience foods that didn’t require preparation, and ultimately developed malnutrition, which has left him with long-term health issues. The mental health problems that had set this train of events in motion worsened. He was desperate to move back to Oxfordshire to be close to his children, but found himself stuck in a bureaucratic gap between different local authorities. On top of this, he couldn’t get onto the waiting list for council housing because of his outstanding rent arrears.
Eventually, a mental health nurse connected him to a homelessness charity called Aspire, based in Oxford. They worked to get Stroud council to write off Midwinter’s £2,000 debt. Suddenly feeling hope, Midwinter started looking for affordable housing in Oxfordshire. One day he saw it: a housing association flat, very close to where his ex-wife and kids lived. It was perfect, and since he was on Universal Credit, the £600 a month rent would be covered. But there was another roadblock. To secure the flat, Midwinter had to pay the first month’s rent upfront, along with a deposit—a total of £1,200. With no access to that kind of cash, he was back to square one. Aspire then referred him to Greater Change which, within a few days, approved a payment for that amount. The flat was his. “After years of waiting, it all happened so quickly,” says Midwinter. “Walking into that flat the first day was unbelievable. It completely changed my life.”
Jonathan Tan previously volunteered at Aspire, and co-founded Greater Change, where he is now the CEO, after running a successful pilot project in 2018 which involved crowdfunding to help homeless people with specific goals: rent deposits, professional training, equipment, mental health support. “The evidence from low- and middle-income countries was fantastic, that cash loans are a very effective tool in fighting poverty and there was no reason to think it couldn’t work just as well here,” says Tan. “It’s dignified and gives people control.” Since then, the charity has moved away from public crowdfunding, but its central aim remains to provide swift cash assistance to people in need. People are referred to Greater Change by other charities, or local authorities, and can request money for a specific purpose.
The average grant that Greater Change gives is around £1,300, which, it says, generates annual savings of £35,000 per person. This figure is worked out based on the cost of temporary accommodation, healthcare and the criminal justice system. Last year, 86 per cent of recipients sustained their tenancies six to 12 months after receiving support.
Individuals are the best judges of what they need
One of the most common requests made to Greater Change is for a one-off grant to clear rent arrears. Sometimes, the amount needed to clear a missed payment and prevent someone being evicted and moved into temporary accommodation can be as little as £400. “It’s just a no-brainer to clear it,” says Oliver Walsh, the charity’s growth manager. In its 2023 impact report, Greater Change calculated that it saved the government £7.4m in the preceding year. “It’s fantastic value for money for the public purse to help people this way,” says Tan. “We don’t need to moralise or theorise about this: the evidence is clear.” Despite this, Greater Change is one of only a handful of charities giving out direct cash transfers in Britain. (One other charity doing similar work is Beam, which still works on a crowdfunding model.)
Central to the idea of direct giving—and what makes it different to housing benefits—is that individuals are the best judges of what they need. “We need to be respectful and break through some of the paternalistic approaches that we have around the distribution of benefits to individuals,” says Hay. “Just because you’re poor doesn’t mean you’re stupid.” One man who received a grant from Greater Change was a security guard, who, as he aged, was having leg pain from standing for long periods of time. He asked for money to buy four pairs of compression leggings, costing a couple of hundred pounds, which allowed him to keep working and pay his rent.
Common requests include funding for furniture or carpets (social housing often comes without either), professional training courses or tools. Ayan (not her real name) became homeless in 2018 when she was 18 and her mother moved back to Somalia. Her local authority did not deem her vulnerable enough to qualify for social housing, and she spent several months sofa-surfing. With the help of a youth charity, she found a job in a hotel and rented a room from a friend’s mum. Her dream was to work in TV and, against the odds, she got a place on a training programme. Then the pandemic hit, and everyone had to work remotely. But Ayan didn’t have a computer, or the money to get one. Faced with the possibility of losing her job, she was referred to Greater Change, who immediately gave her money to buy a laptop. “It was so quick, no questions asked,” she says. “It was such a relief.” The experience was a big contrast to how difficult it had been to get help when she didn’t have anywhere to live, which Ayan looks back on with frustration. “There’s people out here that genuinely don’t put themselves in this situation that just need a bit of support.”
There are clear limitations to the approach; cash assistance can’t solve structural problems, such as an endemic shortage of affordable housing, or the fact that wages have not kept pace with living costs. So far little research has been done on how effective cash transfers are for the most vulnerable homeless population, rough sleepers, who have a higher prevalence of serious physical and mental health problems. Tan argues that direct giving is more helpful for those who are sofa-surfing, stuck in temporary accommodation or at risk of losing their homes. “I think it works best as an early intervention,” he says. “To be clear, personalised budgets can still help people with more entrenched problems, but they might need other support first.”
For the people that it does help, however, an injection of cash can be transformative. Midwinter has been in his flat in Oxfordshire for a year and a half. It took time to fully furnish it, but now he has a dining table that he can sit around with his children, who pop in regularly. “You don’t realise how much you miss the simple things like that,” he says. His life is stabilising. “It feels nice, but odd, when I’m sat in my flat and I see the home I’ve made and think: ‘this is actually mine now’,” he tells me. “I can plan. I can look forward to things that I couldn’t have done before. Without that cash, I genuinely don’t know where I would be.”
