Glasgow City Council plans to borrow money amid £56m homelessness crisis branded 'sticking plaster'

A plan to cover the soaring cost of the city’s homelessness crisis by borrowing money has been labelled a “sticking plaster approach” as renewed calls for government help were made.

Glasgow City Council will meet to set a budget for 2026/27 on Tuesday, but is facing a £56m homelessness pressure. The Scottish Government is allowing the council to use its capital grant to pay the cost of borrowing.

It is proposed as a short-term measure to avoid “significant service cuts and/or council tax increases” in the upcoming financial year 2026/27. But the costs are currently forecast to hit £74m in 27/28 and £91m in 28/29.

Cllr Jon Molyneux, co-leader of the city’s Green group, said: “Glasgow’s homelessness crisis is Scotland’s homelessness crisis – but instead of providing a genuine national solution, the Scottish Government is only ‘allowing’ Glasgow City Council to load on even more debt.

“This is a short-term fix to a growing problem – potentially costing as much as £90m in just a few years’ time. We can’t keep borrowing our way out of trouble.”

Homelessness costs are so high due to huge demand for accommodation, with around £4.5m per month spent on unsuitable B&Bs or hotels. Around half of the demand for homelessness assistance is from refugees.

Cllr Molyneux called for “urgent action at a policy level to reduce the numbers of people presenting here as homeless and to ensure the costs are shared more fairly”.

He added: “The UK Government has refused to even engage with a problem that is largely of its making, but the Scottish Government is also selling Glasgow short with its sticking plaster approach.”

In recent years, the city’s SNP administration has reached a deal with the Greens to pass a budget. However, Cllr Molyneux warned: “The council’s proposals also put vulnerable people at risk by demanding multi-million pound cuts to social work services. That could mean fewer care home beds and cuts to lifeline services for disabled people.

“Green councillors will only support a budget that protects these vital services and takes long-term action on Glasgow’s homelessness crisis.”

It is understood the city’s SNP group are continuing talks with the Scottish Government over the budget.

A report to next week’s budget meeting states the council has a spending gap of £36.8m. The homelessness bill is estimated at £38m in the current financial year, with plans to empty a budget support fund to cover the cost.

To cover the £56m in 26/27, the Scottish Government has “indicated that they will provide a variation to the conditions on the use of general capital grant”, the report adds.

“This variation allows the grant to be used as a contribution to the capital fund in 2025/26 from where it can be used to repay the principal element of borrowing costs.

“This provides a revenue underspend that can be applied over future years to provide capacity to meet the homelessness pressure. This will require the council to undertake additional borrowing with associated borrowing costs of £3.5m.”

The report also suggests a 5% council tax increase would raise £14.5m.

Meanwhile, trade unions are planning a protest on Monday as they call for a mass campaign to win more money from both the UK and Scottish governments.

Members of Unison, Unite, the GMB and EIS are set to gather outside council offices on John Street at 12.30pm to oppose cuts to council funding.

Chris Sermanni, Unison branch secretary, said: “Whilst the council has managed to secure some extra funding by refinancing existing debt, this is still a budget that slashes tens of millions of pounds from public services in the city.

“This puts jobs at risk, either through non-filling of existing vacancies or removing posts through ‘service redesign’. When are the politicians going to stand up for Glasgow and fight for the funding the city needs?

“The council and the Scottish Government are also silent on their plans for increased funding for the implementation of the new pay and grading system. To eradicate pay inequality in the city, the council needs to invest in their workers.”