One in four councils in England has reported an increase in homelessness and more than half have experienced a rise in housing benefit claimants as the recession bites.

A snapshot survey also shows that the demand for free school meals and state school places has shot up, and more people have sought help for mental health problems.

The study carried out at the end of last year shows the extent to which the downturn is affecting demand for a range of public services. Almost all authorities who were contacted expect the situation to get much worse in the next few months as more people lose their jobs and homes.

At the same time one in seven councils is making redundancies and one in four has a recruitment freeze. Nearly 75 per cent have already revised their budgets for the current year, mainly because of a loss of income from service and planning charges.

The survey of 150 councils was conducted over three weeks in November by the Local Government Association (LGA) and the Society of Local Government Chief Executives. Nine out of ten town halls reported a rise or expected rise in the four million people applying for housing benefit, and eight out of ten had registered or expected an increase in the number of homeless people.

Four million people are already on waiting lists for council homes and the LGA has predicted that this will rise to five million by the end of the year.

The financial downturn is also having an impact on school services. Five per cent of councils have registered a rise in the number of requests for free school meals, and 35.7 per cent expect an increase in the next few months. In addition, 6.2 per cent have been contacted by parents applying for state school places for pupils now in private education. More people are also seeking debt and welfare advice, with half of authorities getting more requests for such information.

People who are unable to cope emotionally with losing their job or a financial crisis are putting extra demands on mental health services. Four per cent of local authorities have provided more counselling and services at home for those unable to cope with financial problems, and 35 per cent of town halls predict higher demand on mental health services.

Bridget O’Connell, spokeswoman at Mind, the mental health charity, said that calls related to financial issues had doubled over 12 months. “Over the last year we have seen a rise in calls to the Mind helpline about money issues, from people who are struggling with the emotional impact of debt and financial problems.

“The problem with debt and feelings of depression is that it can be selfperpetuating. The more depressed you are, the harder it is to get the motivation to stay on top of your bills, and the easier it is to slide further into debt,” she said.

argaret Eaton, the LGA chairman, said the research showed how much people were feeling the pinch. “From a rise in homelessness to an increase in mental health problems, councils are reporting a huge uptake in their services,” she said.

“At this time of repossessions and redundancies, even more people need the vital support that only councils can provide. Town halls are taking decisive action to protect people and businesses from the worst effects of the recession. They are helping to keep people in their own homes, offering support to the unemployed and helping small companies stay afloat.”

Today the LGA is publishing a ten-point plan to help cash-strapped families to save up to £2,000 by claiming benefits, installing insulation and using allotments to grow vegetables, among other measures.

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