MPs say Home Office wasted billions on asylum hotel contracts

Shiva K Dhakal
National Press Corporation(NPC)
United Kingdom —The Home Office has wasted billions of pounds of taxpayers’ money on asylum accommodation due to flawed contracts and poor management, according to a new report by the Home Affairs Committee.

MPs said “incompetent delivery” had left the department unable to cope with rising demand and overly reliant on hotels, which became a “go-to solution” rather than a temporary measure.

The committee found projected costs for asylum accommodation from 2019 to 2029 had tripled from £4.5 billion to £15.3 billion. Around 32,000 asylum seekers are currently living in 210 hotels across the UK, costing about £5.5 million a day.

Committee chair Dame Karen Bradley said the Home Office had “neglected the day-to-day management of these contracts”, leading to “failures of leadership at a senior level”. She told BBC Radio 4’s Today programme that auditing to recover excess profits from contractors had only just begun.

The report also highlighted that two accommodation providers still owe the department millions in overpaid profits. MPs concluded the Home Office had shown a “chaotic response” and lacked the skills to manage large-scale housing contracts effectively.

External pressures, including the pandemic and the sharp rise in small-boat crossings, were acknowledged as contributing factors. However, MPs also blamed Conservative government policies, such as the decision to delay asylum processing while pursuing deportations to Rwanda.

Housing Secretary Steve Reed accused the previous government of “pouring taxpayers’ money down the drain”. He said Labour ministers are exploring cheaper alternatives, including disused military sites and long-term rental housing.

Two such sites — Napier Barracks in Kent and MDP Wethersfield in Essex — are already being used to house asylum seekers.

In response, a Home Office spokesperson said the department had already “closed hotels, cut asylum costs by nearly £1 billion, and is exploring the use of military bases and disused properties”.

The government has pledged to end the use of asylum hotels entirely by 2029.