National Audit Office report published on Investigation into Homes for Ukraine

The British public’s generosity enabled the government to move at speed to temporarily support Ukrainians seeking refuge from war, successfully supporting 131,000 Ukrainians arriving into the UK since March 2022 with £2.1bn in funding, according to a new National Audit Office (NAO) report.

The Government gave early consideration to the risks of the scheme and put in place structures to manage them from the outset, but there are still challenges to overcome, including the risk of homelessness as sponsorships end.

The Homes for Ukraine scheme is jointly run by the Home Office (HO) and the Department for Levelling Up, Housing and Communities (DLUHC). 

The visas for the first Ukrainians to arrive under the scheme will expire in Spring 2025, and it is unclear whether government intends to extend existing three-year visas, the UK’s independent public spending watchdog reports.

At the end of September 2023, the government had provided £2.1 billion in funding the scheme, the majority through tariff payments to Local Authorities and thank you payments to sponsors, and DLUHC continues to provide funding for new arrivals. The government has provided £1.1bn in tariff funding to local authorities to support Ukrainians and help them to integrate. This one-off payment per individual was set at £10,500, but was reduced to £5,900 for all arrivals after 31 December 2022. 

This money is not ringfenced as DLUHC wanted local authorities to have discretion in how best to support Ukrainians locally. Some local authorities told the NAO that they are holding amounts in reserve in case of further pressures, as it is not clear whether central government will continue to provide funding.

‘Thank you’ payments of £350 a month in year one and £500 a month in year two are paid to sponsors hosting Ukrainian refugees, but these are due to finish one year before visas expire. Just under 74,000 sponsors have applied to host Ukrainians under the scheme. Unless sponsors are willing to host Ukrainians without those payments, Ukrainians on the scheme will need other housing solutions.

DLUHC and the Home Office recognised safeguarding risks from the outset, and established checks by way of mitigation. Few safeguarding issues have been identified, although data remains incomplete. DLUHC does not hold accurate data on how many guests arrived before checks were completed.

Homelessness data is incomplete, but up until 31 August 2023, 4,890 households (8% of total estimated households that had arrived on the scheme in England at that time) have been assessed by a local authority as being at risk of homelessness or being homeless. This likely understates the true picture, as approximately one third of local authorities are not providing homelessness data to DLUHC and the risk of homelessness is likely to increase, as sponsorships end. DLUHC does not have accurate data regarding the numbers of Ukrainians who have become homeless following their sponsorship ending (see Notes to Editors). Local authorities have taken a range of actions to protect people from becoming homeless, including sponsor rematching and support to move into rented accommodation, and many will have been provided temporary accommodation in the interim.

In December 2022 DLUHC announced £650 million of additional funding to local authorities in recognition of the increased risk of homelessness: a Local Authority Housing Fund (LAHF) of £500 million to acquire housing stock, predominantly for Ukrainians; and, an additional £150 million for homelessness prevention across the UK. Local authorities must spend any money allocated under the LAHF and homelessness prevention before the end of March 2024. Local authorities have acquired 905 additional homes, and DLUHC are currently forecasting that they will acquire a total of 3,365 by the end of 2023-24, with 2,880 expected to be used to house Ukrainians.

By end of July 2023, the Home Office had processed over 182,000 visa applications from Ukrainians, of which 77% were processed within 15 working days, though rates have slowed for more recent applicants. The Home Office was unable to process visas as quickly as it desired at the start of the scheme when Ukrainians were fleeing the war. The department took action to improve processing times by reprioritising visa caseworkers and bringing in 554 staff from other departments.

Since June 2022, the turnaround times have largely taken longer: the number of applications which took, or will take, over 15 working days to process increased from 19% of applications submitted in June 2022 to 63% in July 2023. There were 4,352 applications which were being processed as of 11 September 2023.

In order to set the scheme up quickly, DLUHC accepted an offer from Palantir to provide the IT system it required to administer the scheme for free for 6 months. This enabled the department to quickly get the scheme up and running, but the speed of the deployment meant that it had not carried out the usual testing before it went live, and some local authorities found it confusing to use. Following the initial six-month period, DLUHC directly awarded a 12-month contract in September 2022 worth £4.5 million. DLUHC and Palantir have since resolved many of the initial problems with the system, but DLUHC has not mandated that local authorities use it, and consequently DLUHC recognises it does not have complete data on some aspects of the scheme.

DLUHC stated that it had prioritised delivery over finding an optimal value provider but acknowledged it should plan to move away from Palantir given DLUHC perceived that the costs could be higher than other solutions. In early 2023, DLUHC investigated migrating to an alternative platform, but decided against that on the basis it may cost more due to the start up costs of a new supplier, risks to implementing it on time and potential quality issues.

In September 2023, DLUHC extended the contract with Palantir for a further 12-months at a cost of £5.5 million.

Gareth Davies, the head of the NAO, said:

“The Government worked quickly to help Ukrainians fleeing conflict, enabled by the generosity of the British people who opened their homes.

“The Government will soon need to take important decisions about the future of the scheme, including whether to extend visas beyond three years, and whether to extend funding for local authorities and sponsors, which currently finishes before visas expire. It will also need to carefully monitor key risks, such as safeguarding, and the threat of homelessness as sponsorships end.”

ENDS

Notes for Editors

1. 131,000 arrivals as at 28 August 2023. 
2. An ONS survey in Spring 2023, of people on the scheme who arrived before 15 June 2022, suggested that 4% were homeless and living in temporary or emergency accommodation provided by the council or did not have anywhere to live. Where possible local authorities will seek to prevent homelessness by rematching guests with new hosts.