Funding for councils: Homes for Ukraine

Since the Homes for Ukraine scheme launched in March 2022, the UK government has provided £1.1 billion to councils through a £10,500 tariff for each arrival in their area.

Given that a fraction of Ukrainian arrivals return to Ukraine, after arriving in the UK, and the need to manage public finances at a time of significant economic challenge for the UK and the global economy, the government will reduce the tariff for each local authority.

Councils will continue to receive the existing year 1 tariff to support those Ukrainians that have already arrived, as previously set out. From 1 January 2023, councils will receive funding of £5,900 for each new arrival to support guests and their sponsors (in addition to the ‘thank you’ paid to sponsors). For eligible minors, the year 1 tariff will continue at £10,500 for arrivals after 1 January 2023.

Local authorities will continue to receive separate funding in 2022-23 for the Ukraine education tariff under the rates and terms previously set out (a per child tariff of £3,000 for early years, £6,580 for primary and £8,755 for secondary and payments calculated on a pro-rata basis); and the Ukrainians’ families will also continue to receive government support on skills training, job centre access and welfare payments.

The department will also provide £150 million of new UK-wide funding in the 2023/24 financial year to local authorities and devolved governments to help support Ukrainian guests move into their own homes and reduce the risk of homelessness. This funding will be allocated between the different parts of the UK in relation to their proportion of Ukrainian guests.

In addition, a £500 million Local Authority Housing Fund, will provide capital funding directly to English councils in areas that are facing the most significant housing pressures as a result of recent Ukrainian arrivals. Councils in scope for this funding will be contacted with their provisional allocation, further guidance on the scheme and how they participate. This fund will allow them to address the immediate pressures as well as build a sustainable stock of affordable housing for the future. This fund will also be used to provide homes for up to 500 Afghan families currently living in bridging hotels at a significant cost to taxpayers. Whilst helping to fulfil the UK’s humanitarian duties to assist those fleeing war, the fund will create a lasting legacy for UK nationals by providing a new supply of accommodation for councils with which to address local housing and homelessness pressures.

These measures will help to ensure the sustainability of the programme over the longer term and enable it to help future arrivals seek sanctuary in the UK as the war in Ukraine continues.

Thank you payments

The government is also providing funding for councils to administer the thank you payments at the £350 per sponsoring household per month rate (for up to 12 months) and at the £500 per sponsoring household per month rate (after 12 months up to 24 months), for as long as the guest remains in sponsorship accommodation.

We allocate additional funding for these payments through a ringfenced grant, and we expect councils to cover administration costs within the tariff. There are also conditions attached to this grant, which are explained below.

How payments to councils are made

The Department for Levelling Up, Housing and Communities (DLUHC) will make quarterly payments to councils, in arrears. On 30 June 2022 DLUHC made the first payment to councils in England, to cover the months March to May. On 23 November 2022 DLUHC made the second payment to councils in England, to cover months June to August.

Payments are based on the actual number of Homes for Ukraine guests for the £10,500 tariff (£5,900 from 1 January 2023) and the actual number of ‘thank you’ payments to sponsoring households within each area.

Reconciliation process

DLUHC will conduct a reconciliation process at the end of the financial year to ensure that councils receive their correct entitlement for both the £10,500 tariff (£5,900 from 1 January 2023) and £350 (or £500 from month 13) ‘thank you’ payments.

England including two-tier councils

In England, in two tier areas, both districts and counties have access to funds for their relevant duties under the scheme. Having engaged closely with representatives from the sector to determine the most appropriate payment mechanism, funding for both the £10,500 tariff (£5,900 from 1 January 2023) and thank you payments will be provided to upper-tier councils.

However, in two-tier areas it is a condition of the funding that councils must agree a plan locally to:

• make prompt payments to lower-tier councils in relation to all the services which they provide to guests under the scheme, during the full duration of the scheme, including for services such as homelessness assistance for which lower-tier councils are responsible
• make an immediate payment to lower-tier councils in relation to any upfront costs

Scotland

In Scotland, councils will receive the £10,500 tariff (£5,900 from 1 January 2023) and ‘thank you’ payments directly from DLUHC, except in cases where the Scottish Government are currently acting as a sponsor.

Wales

In Wales, the Welsh Government will receive the £10,500 (£5,900 from 1 January 2023) tariff payments for local councils from DLUHC and will distribute this funding to Welsh councils. The ‘thank you’ payments will be provided directly to Welsh councils by DLUHC, except in cases where the Welsh Government are currently acting as a sponsor.

Northern Ireland

In Northern Ireland, the Executive Office will receive the £10,500 tariff (£5,900 from 1 January 2023) and ‘thank you’ payments from DLUHC and will distribute this funding to Northern Irish councils.

Keeping accurate records on the case management system (CMS)

We will continue to collect data relating to the programme in the CMS, through which we expect councils to upload relevant data as soon as possible and ideally on a weekly basis.

Councils must maintain accurate records on the number of guests and sponsorship households in their area. It is critical that this data is accurately captured and reported to DLUHC to enable payments of funding to be made.

Councils must use the tariff to meet all of their associated costs (both for providing council services to guests and for administering payments), this includes any discretionary top up to the ‘thank you’ payment. We recognise, however, that a small number of councils may incur additional essential costs above and beyond what could reasonably be regarded as normal expenditure and not available through other mainstream funding mechanisms. We will therefore consider claims for such costs on an exceptional basis only.

We ask that any council who may be experiencing unmanageable pressures to contact DLUHC in the first instance.

Funding for education

The government is also providing additional funding to councils in 2022-23 to provide education and childcare services for children from families arriving from Ukraine under this scheme.

The Department for Education (DfE) will allocate funding, pro-rata on a per pupil basis for the 3 phases of education based on the following annual rates:

• early years (ages 2 to 4): £3,000
• primary (ages 5 to 11): £6,580
• secondary (ages 11 to 18): £8,755

These tariffs include support for children with special educational needs and disabilities (SEND).

More information is available on education and childcare funding, including the grant terms and conditions for England.