Finland has found the answer to homelessness. It couldn’t be simpler

The Guardian, by Harry Quilter-Pinner

I was born in Liverpool and grew up on a council estate. I had a clean home, toys and nice meals as a kid. When I was nine years old, the sexual abuse started. My abusers made me feel special. They gave me gifts, moneys, cigarettes and sweets. When I was 13 I ran away from home and soon found myself in the murky world of prostitution on the streets. My life was out of control.”

This is how it all started for Simon. I met him 23 years later at SCT, a local charity I help to run in east London that offers support to people who are homeless and face alcohol and drug addiction. He used to make me coffee every morning at the social enterprise cafe we run. In the intervening period he had spent years in and out of hostels and institutions, as well as long spells on the streets.

When I met him, Simon was sober and working for the first time in years. He said at the time that SCT “offered me the opportunity to get my life back on track. Life is worth living now. I’m looking forward to my future.” Tragically, this future wasn’t to be: soon afterwards he decided to return to the streets and died as a result.

I would like to be able to say that Simon’s story is an exception. But in reality it is all too familiar, as new statistics published by the Guardian showed on Wednesday. The number of homeless people dying on the streets or in temporary accommodation in the UK has more than doubled over the past five years to more than one per week. The average age of a rough sleeper when they die is 43, about half the UK life expectancy.

The tragedy is that it’s entirely within our power to do something about it: homelessness is not a choice made by the individual, it is a reality forced by government policy. As homelessness has rocketed in the UK – up 134% since 2010 – it has fallen by 35% in Finland over a similar period of time. The Finnish government is now aiming to abolish it altogether in the coming years.

I recently travelled to Finland to understand how it had done this. It turns out its solution is painfully simple and blindingly obvious: give homes to homeless people. As Juha Kaakinen, who has led much of the work on “housing first” in Finland, explained to me when I met him in Helsinki, “this takes housing as a basic human right” rather than being conditional on engaging in services for addictions or mental health.

This is fundamentally different to our model in the UK, where stable accommodation is only provided as a “reward” for engaging in treatment services. The problem with this is obvious if you stop and think about it: how do we expect people to address complex personal problems while exposed to the chaos of life on the streets?

Sceptics will argue that giving homes to homeless people is a recipe for disaster. Aren’t we just subsidising addiction? Won’t we end up with huge bills when it all goes wrong? Don’t people need an incentive to get their lives back on track and engage in services?

Actually, no. The evidence from Finland – as well as numerous other pilot schemes across the world – shows the opposite is true. When people are given homes, homelessness is radically reduced, engagement in support services goes up and recovery rates from addiction are comparable to a “treatment first” approach. Even more impressive is that there are overall savings for government, as people’s use of emergency health services and the criminal justice system is lessened.

At the last election, the government committed to pilot a housing first approach in the UK. This isn’t good enough – we don’t need another pilot. During my time in Finland I didn’t see one homeless person. Within a few hours of coming back to London I walked past more than 100 rough sleepers queuing for food in the rain, just a few minutes from parliament. What we need is action. Ending homelessness is eminently achievable if we have the moral capacity and will to take proper action. We must overcome our prejudices and our apathy. The status quo is simply not good enough.

Commenting on The Ferret’s investigation, Scottish Labour’s economy spokesperson Jackie Baillie MSP said: “This is an astonishing amount of taxpayers’ money that has seemingly been given to firms with little long-term benefit for the Scottish economy.

“Of course every investment is a risk and it’s important that businesses get the support they need, but to have taxpayers’ money pumped into firms only for them to go bust raises serious questions about due diligence by Scottish Enterprise.

“The SNP must urgently commit to reviewing Scottish Enterprise’s practices to ensure proper due diligence is taking place and taxpayers’ money is being put to good use.”

But SE defended its grants and said its role was to develop the Scottish economy which involved taking financial risks.

A spokesperson continued: “In doing this, we’ve supported some of the country’s fastest-growing companies, including Scottish ‘unicorns’ FanDuel and Skyscanner.

“Before we invest public funds, we undertake robust due diligence to ensure we balance the inevitable risks with the scale and prospect of economic returns.

“We have robust processes and criteria that must be met by companies seeking our financial support. However, the nature of business growth means that some companies will fail in the end, despite our support.

“When we invest or award a grant to a company that subsequently fails, we always attempt to recover the appropriate public funding.

“We recognise that business failure is part of the economic landscape, with companies that fail still generating economic impact over their lifetimes through wages, income taxes raised directly, IP created and jobs supported through the supply chain.”

“We have robust processes and criteria that must be met by companies seeking our financial support. However, the nature of business growth means that some companies will fail in the end, despite our support.”

Another firm to receive taxpayers’ money was Freescale Semiconductor Holding UK Ltd. It was awarded £2,589,050 but was liquidated in December 2017.

A waste water recycling firm called ReAqua Systems Limited received £1,475,000 but was wound up in 2015.

Pelamis Wave Power Limited was given £7, 238, 602 but was dissolved in 2014. It was viewed as an icon on marine renewables industry but failed to secure funding to develop.

The Edinburgh-based firm was testing its wave energy converters at the European Marine Energy Centre in Orkney for a number of years.

Announcing the administration move, the company said: “The directors of Pelamis regret to announce that they have been unable to secure the additional funding required for further development of the company’s market-leading wave energy technology.

Patrick Harvie MSP, of the Scottish Greens, also voiced concern over SE’s grants. He said: “At a time when public services are under severe pressure, the Scottish Government and it’s agencies cannot afford to throw cash around whenever the private sector holds out its hands and asks for more.

“When public money is invested in private businesses it must be on the basis of a fair return to the public purse. No other investor would expect to be lavish with the chequebook and not expect a fair return.”

Scottish Liberal Democrat economy spokesperson Carolyn Caddick said: “There is always a risk of start-ups not making it and investments going wrong,” but added that the amount of lost money was “extremely disappointing.”

“The Scottish Government’s record for picking winners is looking pretty ropey. Of course, they did hand millions to Amazon despite the fact they pay workers below the proper Living Wage.

“The Scottish Government must ensure that stringent checks take place before they hand over a fat cheque.”

However, the Scottish Government’s Economy Secretary Keith Brown, defended SE’s grants and said: “Investing in job-creation and innovation is a vital part of supporting and growing the Scottish economy – it seems Labour, the Greens and Lib Dems are not interested in that and would cut funding to support companies.

“Obviously, there are no absolute guarantees on the viability of individual firms, but the overall impact of these grants can result in substantial economic gains for the country as a whole.”

Between 2012 and 2016, SE generated £74 million of income from its equity investment activities which were ploughed back into Scottish businesses.

The agency added that it invested £63.5m into 146 Scottish companies which leveraged a further £106m of private sector investment into these same firms in 2016/17.

In 2017, SE “innovation grants” secured £424 million of investment in new research and development activity in Scotland while generating £750 million of new revenue from innovation projects.

For more background on risk capital investment and economic reward, SE suggested that people read an article by its interim chief executive, Paul Lewis.