The Home Office has wasted billions of pounds of taxpayers’ money on asylum hotels, MPs say

Asylum accommodation costs are expected to triple amid a “failed, chaotic and expensive” system which has wasted taxpayers’ money, according to a committee of MPs.

A damning report by the Home Affairs Committee says expected costs of Home Office accommodation contracts for 2019-2029 have tripled from £4.5bn to £15.3bn. This follows a “dramatic increase” in demand following the COVID pandemic and rising numbers of those arriving by small boat.

The report, by a committee of MPs, criticises the Home Office for failing to reclaim excess profits from asylum accommodation providers totalling tens of millions of pounds owed to the department.

The government has promised to end the housing of asylum seekers in hotels by 2029 amid mounting pressure over costs and a backlash in local communities.

But the report said that, without a clear plan for alternative accommodation, the government risks “under-delivery and consequently undermining public trust still further”.

It added that the Home Office repeatedly cut corners in its “chaotic” response to pressures.

Committee chair Dame Karen Bradley called for the government to “get a grip” on the system “in order to bring costs down” and learn from its mistakes, or it is “doomed to repeat them”.

She added: “The Home Office has not proved able to develop a long-term strategy for the delivery of asylum accommodation. It has instead focused on short-term, reactive responses.”

The committee’s report also noted the Home Office failed to engage with communities and local residents who have “genuine concerns” over asylum hotels in their area, as well as people travelling from other areas “to promote divisive agendas or instigate disorder”.

MPs have pressed for the Home Office to prioritise closing hotels where there have been “significant community cohesion issues” – including in Epping, Essex, where demonstrations outside the Bell Hotel were held after migrant Hadush Kebatu was charged and later jailed for sexual assault.

The report said: “The Home Office has undoubtedly been operating in an extremely challenging environment, but its chaotic response has demonstrated that it has not been up to the challenge.

“The 2026 break clause and end of the contracts in 2029 represent opportunities to draw a line under the current failed, chaotic and expensive system and move to a model that is more effective and offers value for money.

“The lack of engagement and transparency has left space for misinformation and mistrust to grow, which in too many areas has led to tensions and undermined the ability of local partners to promote social cohesion.”

It also said the government has mismanaged contracts handed to hotels used to house asylum seekers. This includes a lack of fines for hotels that have poor performance and not claiming tens of millions of pounds in excess profits.

Read more:
Who says what on asylum hotels
Where can asylum seekers go if they can’t be housed in hotels?
A council-by-council breakdown of how many asylum seekers are in hotels

The committee has instead called for a future accommodation system to be based on fairness rather than cost alone, to improve communication with local communities and be flexible to meet unpredictable demands.

A Home Office spokesperson said: “The government is furious about the number of illegal migrants in this country and in hotels.

“That is why we will close every single asylum hotel – saving the taxpayer billions of pounds.

“We have already taken action – closing hotels, slashing asylum costs by nearly £1bn and exploring the use of military bases and disused properties.”