MHCLG said it had already begun to focus funding on prevention in a number of ways, including the introduction of a new £270 million grant for children’s social care prevention. It had also increased the overall homelessness prevention grant for 2025–26 and specified that 49% must be spent on prevention, relief and staffing activity rather than on providing temporary accommodation.42 MHCLG told us that there was compelling evidence that shifting to prevention, particularly for children’s social care, homelessness and temporary accommodation, results in improved outcomes for people along with quick payback periods. MHCLG did recognise the challenge for local authorities of ringfencing funding and said that, although it avoided this where possible, it had been necessary to shift spending to help manage demand for homelessness services given the poor 36 C&AG’s Report, para 2.6 37 C&AG’s Report, para 2.6 38 LGFS0006 39 Q 64 40 Q 104 41 Q 104 42 Q 104; MHCLG, Homelessness Prevention Grant 2025–26: technical note, 18 December 2024 14 outcomes for people in temporary accommodation.43 MHCLG told us that pooling of funding in a place, flexibility of funding and the right performance measures can help improve outcomes for people over time.44 43 Qq 63, 104 44 Q 104 15 2 Government’s response to local funding pressures National Insurance Contributions (NICs)