Greenwich Council has approved plans to spend up to £5 million on hotel room bookings to be used exclusively for emergency accommodation, as the number of homeless households in the borough hits record numbers.

The council has reserved 70 rooms at the Radisson Red hotel on Tunnel Avenue to use for emergency accommodation.

The authority awarded the contract to Theori Housing Managements Services Ltd for use of the hotel for nine months at a cost of £2.14m.

Council documents said the term can be extended by up to a year, which would lead to the total cost of the contract being just over £5m.

The report added that there were currently over 1,950 households in the council’s care in temporary accommodation, the most the authority had ever seen.

The council has forecast a £6m overspend in its annual budget for temporary accommodation by next April, following a £10m overspend the year before.

This was largely attributed to its reliance on chain hotel rooms, claiming it was paying for about 250 hotel rooms at an average loss to the authority of £70 per room per night.

The rooms in the contract would be available with no restriction on the lengths of bookings, with council officers saying in their report that the authority was currently relying on hotel rooms located outside the borough and with maximum stays of 28 nights each.

Council officers said that the authority was receiving an increasing number of legal challenges and complaints from placements not being in the borough and the new contract could provide savings of approximately £300,000 a year for the council.

The report said: “The majority of these rooms are not in our borough, placing additional stresses and strains on homeless families.

"This is unsustainable and places unacceptable risk on the council’s finances and its ability to manage the provision of temporary accommodation. It is therefore essential that the council takes urgent steps to addressing the situation.”

The Radisson Red hotel on Tunnel Avenue was previously used by the Home Office as a contingency hotel for those seeking asylum in the country.

The new agreement will ensure a housing officer is present at the hotel at all times, with a safeguarding team and health and safety officer available offsite.

Council documents stated the authority was not relying on hotel rooms to address emergency accommodation concerns as recently as two years ago.

A report from October last year revealed Greenwich Council had spent £800,000 in one month on Travelodge rooms amid ‘unprecedented and unforeseeable’ rises in emergency accommodation.

The report said over 200 households had been placed in hotels by the council at the end of June 2023.

Council officers said the authority had purchased over 550 homes since 2017 to reduce its reliance on Travelodge.

They added that ‘fierce competition’ had led councils to outbid each other to secure non-chain hotel bookings in other London boroughs, breaching a London-wide agreement.