Fewer homeless families are using bed and breakfast accommodation than at any time over the past 10 years, a local government report will announce this week.

The findings of a survey by the Association of London Authorities (ALA), to be published this Friday, will show that there are now 2,178 families living in B&B, compared with 3,130 in 1984. This is less than a third of the record total, reached in 1987, when 7,970 families used B&B as a means of temporary accommodation.

In 1983, B&B accounted for 61 per cent of all temporary accommodation, yet this figure has now fallen to just 6 per cent.

The report will reveal that by next year no London council, apart from Wandsworth, will be placing more than 50 families in B&B hotels. According to the ALA dossier, one borough in five no longer uses B&B at all. It predicts that by 1996 that figure will have dropped to one in three.

The report will send a strong message to the Government that it would be cheaper to allow councils to provide permanent homes than continue using B&Bs.

It will suggest steps ministers could take to enable boroughs to eliminate the B&B option altogether. These include extending leases on privately rented properties and distributing existing resources towards boroughs with a greater need.

Pete Challis, the association's housing chairman, said that accommodating homeless families in B&B was now recognised as unsuitable. 'More and more boroughs are eliminating the use of bed and breakfast for all but emergencies.

'This is no thanks to the Government. In the face of increasing homelessness and centrally-imposed budget cuts, councils have found innovative ways of providing decent temporary accommodation.

'Yet the only way to banish homelessness is to provide more decent, affordable homes for rent.'

The ALA's head of policy, Will Tuckley, said the reduction in the use of B&B was due to a combination of increased leasing, boosting the supply of homes by utilising empty properties, and obtaining high levels of housing association nominations.

'It costs pounds 12,000 to keep a family in bed and breakfast for a year as well as the costs of unemployment benefit paid out to unemployed construction workers.

'If you work out how much it would cost to borrow money to build a house and how much you would save by not paying out benefit to those workers, it would actually be cheaper than housing families in B&B'

But, despite the reduction in B&B use, the ALA said the problem of accommodating stranded families remained extremely serious because of near-record levels of homelessness. Up to 34,000 families are living in temporary accommodation of some sort, which represents about 80,000 people, including 34,000 children.

London boroughs account for 60 per cent of all temporary accommodation used for homeless families in England.

The number of such families which boroughs have a duty to rehouse remains high. London councils accepted 36,587 households as homeless over the 12 months to March 1993, compared with 21,100 in 1982 and 14,672 in 1978.