Home Office ‘squandered billions’ on asylum accommodation, MPs say

The Home Office has “squandered” billions of pounds of taxpayers’ money on asylum accommodation, according to a report by a committee of MPs.

The Home Affairs Committee said “flawed contracts” and “incompetent delivery” left the department unable to cope with a surge in demand and it relied on hotels as “go-to solutions” instead of temporary stop-gaps.

The MPs said expected costs had tripled to more than £15bn and not enough had been done to recoup excess profits.

A Home Office spokesperson said the government was “furious about the number of illegal migrants in this country and in hotels”, and reiterated its pledge to end the use of asylum hotels by 2029.

Around 32,000 asylum seekers are currently living in 210 hotels whilst their applications are processed, costing the government around £5.5m a day.

The report said the current system for housing people seeking asylum – with its reliance on hotels – was expensive, unpopular with local communities and unsuitable for the asylum seekers themselves.

The report said the contracts drawn up for accommodation providers under the Conservatives had been flawed and that “inadequate oversight” had meant failings went “unnoticed and unaddressed”.

Expected costs for hotel contracts from 2019-2029 have risen from £4.5bn to £15.3bn, while two accommodation providers still owe millions in excess profits that the Home Office has not recovered, the report found.

Chair of the committee Dame Karen Bradley told BBC Radio 4’s Today programme: “We just ended up with more people than the contracts ever thought there could be and that’s meant that the costs have absolutely rocketed.”

“The government has only just started looking at claiming back those profits, auditing the accounts to see what is due back to the taxpayer,” Dame Karen said.

The said “failures of leadership at a senior level” were among reasons the Home Office was “incapable of getting a grip on the situation”.

Dame Karen said the department had “neglected the day-to-day management of these contracts” and has focused on “short term, reactive responses”.

“The skills needed to manage these contracts simply were not present in the Home Office when they were drawn up,” she added.

External factors, including the pandemic and the “dramatic” increase in small boat arrivals, have meant the Home Office has had to accommodate “a growing number of people for longer periods of time” the report said.

Choices made by the previous Conservative government, including to delay asylum decisions as it pursued the scheme to deport migrants to Rwanda, factored into this, MPs added.

While the report acknowledged the “challenging environment” in which the Home Office was operating, it said “its chaotic response has demonstrated that it has not been up to the challenge”.

The MPs said they had heard too many cases of inadequate asylum accommodation and unaddressed safeguarding concerns for vulnerable people.

Housing Secretary Steve Reed accused the previous government of “pouring taxpayers’ money down the drain”.

He added that Labour ministers were continuing to look at housing asylum seekers on disused military bases, as they are the “least expensive option available”, alongside longer-term rental accommodation options.

Two former military sites – MDP Wethersfield, a former RAF base in Essex, and Napier Barracks, a former military base in Kent – are already being used to house asylum seekers after being opened under the Conservatives.

Dame Karen welcomed the government’s pledge to shift away from asylum hotels and invest in larger sites like military bases.

But she said past failings, like moving people into accommodation too quickly, must not be repeated.

“On large sites, once the lessons have been learned, facilities are much better, people are in much more suitable accommodation and it can be better for everybody,” she said.

In response to the report, a Home Office spokesperson said: “We have already taken action – closing hotels, slashing asylum costs by nearly £1 billion and exploring the use of military bases and disused properties.”

Several protests and counter-protests over asylum hotels have taken place across the UK this year, notably in Epping over the summer after an asylum seeker being housed at The Bell Hotel was charged with two sexual assaults.