Opposition Councillors have stated their disappointment with the decision and have suggested the Council doesn't have a short-term answer to get people off of the streets.
The ruling out of a hostel came from the Labour Leader of MK Council Peter Marland during a meeting of the Cabinet last night (6th March).
The comments were in stark contrast to Bedford Borough Council who last week opened a £7 million hostel getting 29 individuals off the streets into a home and the provision of a 24 hour support service.
Milton Keynes Council have reserve savings in the bank of up to £170 million.
In their own Rough Sleeping Strategy, Labour confirmed there could be up to 100 people in Milton Keynes sleeping rough.
The Conservative Housing and Homelessness spokesperson Cllr Catriona Morris said:
"I am very surprised Labour are ruling anything out at this stage. Another winter has come and gone and the Council have failed to find a short-term response. We all agree that there are complex issues and there has to be a long-term approach but we can't just leave people on the streets. Labour seem to keep saying no to things rather than taking action.
"The strategy put forward has some good messages but it falls short of any serious proposals. They have taken on the Government's Housing First approach which is a positive move, but what everyone will be asking is why has it taken so long."
In the recent Council budget debate Labour voted against a Conservative amendment to invest £2million from the substantial reserves into supporting rough sleepers.
Labour have recently said they will provide a bed for every rough sleeper.
In a statement to MKFM, the leader of the council Peter Marland said ''The budget already contains over £2m for homelessness, including £500k for helping rough sleepers. We are now offering a bed to any homeless person on the street who wants it and putting other support services in place. This is ongoing funding despite ongoing cuts of over £144m to MK Council. The real level of reserves if you discount money put aside for infrastructure projects, money we hold for schools and ring-fenced housing money is around £17m, and dropping below that would put us at risk of becoming like Tory-run Northamptonshire.