It costs Greater Change just £1,300 to help an individual out of homelessness.
This saves the public purse over £29,000 per annum. A return of over 20x
Recent studies show that unconditional cash transfers are a highly effective tool in the fight against homelessness. This article will explore the history of unconditional cash transfers as a homelessness solution across the world and their potential to tackle homelessness in the UK.
Unconditional cash transfers to tackle homelessness involve providing personal grants directly to individuals or households without imposing specific conditions or requirements on how the money should be spent. This approach aims to address homelessness by giving people the financial resources they need to secure housing, cover basic necessities, and improve their overall well-being.
Unlike traditional welfare programs, unconditional direct cash transfers do not dictate how recipients should use the funds, allowing them the flexibility to address their most pressing needs, which can include securing stable housing and accessing essential services.
This approach is based on the belief that empowering individuals with financial resources can help break the cycle of poverty and homelessness, providing them with the means to regain stability and improve their quality of life.
The most in depth study of unconditional cash transfers to tackle homelessness was conducted by Foundations For Social Change in Vancouver, Canada, where 50 homeless individuals were given personal grants of $7,500 each. The recipients were allowed to spend the money however they wished. Over the course of a year, researchers followed up with them, comparing their outcomes to a control group of 65 homeless individuals who did not receive cash but had access to workshops and coaching.
Contrary to stereotypes, the recipients of the direct cash transfers did not increase spending on drugs, alcohol, or tobacco. Instead, they spent more on essential items like food, clothes, and rent, leading to faster transitions into stable housing. The study challenged misconceptions about the poor's financial decision-making abilities, showing that people experiencing homelessness made wise choices when given financial agency.
Additionally, the study demonstrated that giving cash transfers saved money for the broader society. Enabling people to move into housing more quickly resulted in significant savings for the shelter system. The research highlighted the effectiveness of providing cash to low-income individuals and challenged existing stereotypes, although it emphasised that long-term solutions to homelessness require affordable housing in addition to financial assistance. The success of the study has led to discussions about implementing similar programs on a larger scale in Canada and the US.
Another key example of the success of unconditional cash transfers is the Denver Basic Income Project. The project, initiated by entrepreneur Mark Donovan in partnership with the city and funded by a $2 million contribution, provided varying amounts of cash to participants who were homeless, ranging from $50 to $1,000 per month.
After six months, researchers from the University of Denver found significant positive changes among participants. Those receiving $500 or more per month reported substantial improvements, with over a third moving into their own housing, reducing visible homelessness, and feeling safer in their living situations. Even participants who received as little as $50 per month saw some improvement, though to a lesser extent.
The project further suggests that direct cash assistance can be effective in addressing homelessness and improving the lives of vulnerable populations.
So far there has been little research or application of unconditional cash transfers to tackle homelessness in the UK. This is set to change, however, with an initiative led by the Centre for Homelessness Impact and evaluated by academics at King's College London.
The initiative, led by organisations including The Wallich, Simon Community Scotland, Greater Manchester Combined Authority, and St Martin-in-the-Fields Charity, aims to understand if giving personal grants, without conditions, can help people move permanently out of homelessness. The experiment, taking place in Manchester, Glasgow, and Swansea, will involve 180 participants, half of whom will receive a one-time personal grant determined by a lottery.
Though not unconditional, Greater Change have already been highly successful in tackling homelessness in the UK through direct personal cash transfers. These personal cash transfers fund things that will have a significant impact in bringing individuals out of homelessness or preventing them from becoming homeless in the first place. This includes clearing rent arrears, paying for a rent deposit for social housing or ensuring housing is properly floored and furnished.
Greater Change believe that giving cash directly is the most effective way of bringing people out of homelessness, whilst being very cost effective for the public purse. On average, it costs us just £1,300 to get each person out of homelessness. This saves the public purse over £35,000 per annum, a return of over 20x.
Over 86% of the people we supported last year moved into housing they could sustain in the long run. Greater Change has supported over 750 people so far and the freed up capacity for services means that we have saved over £21 million pounds to the public purse in our 4 years of operations so far.
Greater Change want to support 1000 people in the next 2 years and build up to 40,000 by 2033; which will mean we will have made a real dent in the problem, generating over £1bn in value to society. Our vision is to ultimately influence public policy to take on direct personal cash transfers and provide a long term solution to homelessness.
Overall, it is clear that both conditional and unconditional cash transfers have major potential to provide a long term solution to homelessness. Giving individuals who are homeless autonomy and empowering individuals with financial resources can help break the cycle of poverty and homelessness, providing them with the means to regain stability and improve their quality of life.