It was announced on Thursday that London councils spend £4 million daily on housing homeless people.

In the year ending in April, the capital's councils' combined average monthly spend for temporary housing was £114 million, a sharp increase of 68%.

The cross-party London Councils group recently released a report titled London's Homelessness Emergency, which found that homelessness is at record highs and cautioned that the current state of affairs is "utterly unsustainable."

The soaring cost of social care and private rents alongside a diminishing number of social homes is pushing some of London’s town halls to the brink of bankruptcy and forcing them to seek emergency loans from the Government.

Ahead of the Chancellor’s Budget on October, boroughs warned that skyrocketing homelessness was the fastest-growing risk to boroughs’ financial stability and they are facing a collective £700million funding gap next year.

Waltham Forest leader and London Councils executive member for housing Grace Williams said: “The homelessness situation in the capital is nothing less than an emergency.

“London is the epicentre of a national crisis – we are grappling with the most severe housing and homelessness pressures in the country.

“Homelessness is an injustice and has a devastating impact on individuals and families, undermining Londoners’ health, wellbeing, and opportunities.

“As these figures show, it also brings utterly unsustainable costs to councils. Without urgent action, homelessness pressures will break London boroughs’ budgets.

“We welcome the government’s commitment to tackling homelessness and to building the affordable housing our communities need. Boroughs are relying on the upcoming Budget to bring renewed support for local homelessness services and policies to reduce homelessness as quickly as possible.”

Newham town hall is among those proposing a raft of extreme cost cutting measures due to its temporary housing bill. This year alone it anticipates it will overspend by £47million, of which £31million is for housing homeless families and £16million for social care costs.

London Councils’ report found:

• More than 183,000 Londoners are estimated to be homeless and living in temporary accommodation arranged by their local council - the highest number ever recorded in the capital and equivalent to at least one in 50 residents
• The number includes almost 90,000 children, which means on average there is at least one homeless child in every classroom
• There have been a 662 per cent increase in families placed B&Bs by their boroughs because of suitable accommodation shortages
• Rough sleeping has also grown significantly, increasing by 58 per cent since 2014

Business leaders have also warned that unless something is done to make the capital’s housing more affordable and accessible, the city’s economy will be take a hit.

Stephanie Pollitt, programme director for housing at BusinessLDN, said: “These figures are a stark reminder of the pressing need to tackle London’s housing crisis.

“Next week’s Budget must include measures which will help unlock new homes, including certainty over future social rent levels, a more ambitious Affordable Homes Programme and backing for major infrastructure projects which connect communities.

“We also need to see more pragmatic approaches to Section 106 agreements, including allowing housebuilders to provide direct financial support for council homes.”