Borrowing of up to £5million has been approved by Gloucester City Council to buy buildings for homeless people in the city.

Households facing life on the streets have leapt up in the last year and expensive hotel bills have left the council with a £1.1m budget overspend.

It has now agreeded to set up a new capital investment fund to enable an acquisition programme for buildings or other structures.

They will look for properties across the district and outside Gloucester to be used as temporary accommodation for households who present as homeless.

The number of families in need has risen sharply with a 12% increase over 12 months and now stands at 182.

It has been attributed to a disparity in the cost of renting compared to local housing allowance rates. And the figures are expected to rise further over the coming year due to "social conditions", creating "significant" pressure on the council's budget.

Last week Cllr Richard Cook, leader of the council, told Punchline  there was a "huge problem with homelessness due to the cost of living, refugees and rents going up."

The council  has a legal duty to help families who have nowhere to live but only three buildings to put them in and has not seen an increase in government funding for the problem in years.

It has only been able to house 11% of families in council-owned buildings, with 38 households in hotel rooms, compared to 10 households at the same point last year.

The new fund acquisition plan was approved at a full council meeting on Thursday (Nov 16). Members also agreed to outsource any building work required and management of the properties with total costs for the project not exceeding £5m.

The council hopes it will help ease the crisis but said the scale of the current demand means the money will not fully address the issue and further work will be needed to reduce other costs and prevent homelessness going forward.

The council also agreed to continue lobbying MPs to provide additional revenue and capital funding to enable the council to meet its obligations to tackle homelessness within the city of Gloucester.

It also agreed to endorse a letter sent by Cllr. Sam Chapman-Allen chairman of the District Council Network to the chancellor, Jeremy Hunt MP, which called for the government to urgently:

• Raise Local Housing Allowance rates to a level that will cover at least 30% of local market rent and commit to annual uprating.

• Provide £100m additional funding for Discretionary Housing Payments in 2023-24 and an additional £200m in 2024-25.

• Provide a £150m top-up to the Homelessness Prevention Grant for 2024- 25.

• Review the cap for housing benefit subsidy rate for local authority homelessness placements.

• Develop policy to stimulate retention and supply in the privately rented sector.

• Give councils the long-term funding, flexibility and certainty needed to increase the supply of social housing.