The Home Office has “squandered billions” of pounds in public money on housing asylum seekers in hotels, a damning report by MPs has found.
The Home Affairs Committee said “flawed contracts” and “incompetent delivery” had left the department unable to manage rising demand, forcing it to rely on hotels as a default option rather than a temporary measure.
According to the cross-party committee, projected costs for asylum accommodation have more than tripled — soaring from £4.5bn to £15.3bn between 2019 and 2029. Two major contractors still owe the Home Office millions in excess profits, the report added.
‘Chaotic and reactive’
Committee chair Dame Karen Bradley said the department’s failure stemmed from “a lack of leadership and long-term planning”.
“We just ended up with more people than the contracts ever anticipated, and costs have absolutely rocketed,” she told BBC Radio 4’s Today programme. “The government has only just started looking at reclaiming profits and auditing accounts to recover what is due back to taxpayers.”
The report accused the Home Office of “neglecting day-to-day management” of accommodation contracts and responding with “short-term, reactive measures” instead of strategic reform.
Billions spent on hotels
Around 32,000 asylum seekers are currently housed in 210 hotels across the UK, at a cost of about £5.5 million per day.
The committee described the system as “expensive, unpopular and unsuitable” for both local communities and asylum seekers. It also highlighted repeated safeguarding failures in hotels and poor oversight of contractors.
The report acknowledged that the pandemic and a surge in small boat arrivals had placed the Home Office under strain. However, it said decisions by the former Conservative government — including the delay of asylum processing to support the now-defunct Rwanda deportation plan — had worsened the crisis.
Political fallout
Housing Secretary Steve Reed said the previous government had “poured taxpayers’ money down the drain” through mismanagement.
He confirmed that the Labour government is pursuing cheaper alternatives, including the use of disused military bases and longer-term rental accommodation.
Two former military sites — MDP Wethersfield in Essex and Napier Barracks in Kent — are already being used to house asylum seekers.
Dame Karen welcomed plans to move away from hotels but urged ministers not to repeat past mistakes. “Once lessons have been learned, larger sites can provide better, more suitable accommodation for everyone involved,” she said.
Home Office response
A Home Office spokesperson said: “We are furious about the number of illegal migrants in hotels. We have already taken action — closing hotels, reducing asylum costs by nearly £1bn and expanding the use of military bases and disused properties.”
The department has pledged to end the use of asylum hotels entirely by 2029.
Several protests and counter-protests have been held across the UK this year over asylum hotel use — including in Epping, where an asylum seeker housed at The Bell Hotel was charged with two sexual assaults during the summer. Photo by Steve Cadman, Wikimedia commons.