The government spent millions on a plan to house London’s homeless. Then it all went wrong.

The official from the borough of Havering was seething. The mood in the Teams call had been tense from the beginning. But something had snapped. He and the other housing directors from ten of London’s local governments were growing increasingly frustrated with what they were hearing from Sue Edmonds, a usually assured executive who headed a state-funded, silver-bullet effort to provide a systemic solution to the capital’s burgeoning homelessness crisis. For months, Capital Letters had failed to deliver enough homes, costing the councils millions. That year, Havering alone had overspent its budget for emergency homeless accommodation by £6m and was facing down a devastating black hole in its next budget. The June meeting was convened to inform them of another delay in a plan that they were promised was going to help cut the cost of that bill.

“That’s when the anger really accelerated... They were furious; the director from Havering went on and on about how bad it was,” says a council official who was in attendance, adding that Edmonds looked uncharacteristically shaken. “There was frustration,” Edmonds recalls, because the officials were desperate for properties. “The reality is there were no properties to procure.”

Most Londoners will never have heard of Capital Letters. The not-for-profit company, launched in 2019 and backed with the promise of £37mn of government money, was an ambitious attempt to construct a city-wide approach to provide housing for those in need and save taxpayers’ money. Its early troubles compelled one ex-staff member to send a whistle-blower letter to her MP in late 2020 — a very busy Boris Johnson – but there was no intervention. Then this year, Capital Letters announced it was shutting down. What went wrong?