Key Takeaways
• Hotel accommodation now costs £3.1 billion annually, making up 76% of asylum housing expenses despite housing 35% of claimants.
• Estimated ten-year asylum accommodation costs have soared from £4.5 billion to £15.3 billion due to increased demand and underused large sites.
• The National Audit Office warns that without major changes, high spending on asylum housing in the UK will likely persist for years.
The cost of providing accommodation for people seeking asylum in the UK 🇬🇧 has reached much higher levels than anyone in government expected just a few years ago. This is not just about more money being spent but also about the reasons behind this sharp rise, how decisions have played a role, and what it could mean for taxpayers, local communities, and those who depend on the asylum system. Analysis from VisaVerge.com suggests that understanding these cost pressures and changes is important for anyone keeping track of the UK 🇬🇧 immigration debate.
The National Audit Office (NAO), an agency that checks how money is spent by the government, has released a new report that shines a light on the realities behind the numbers. This article explains what is going on with asylum accommodation spending in the UK 🇬🇧, why things have changed so quickly, and what the future might hold.
Why Are Asylum Accommodation Costs in the UK 🇬🇧 So High?
When the UK 🇬🇧 government set up its Asylum Accommodation and Support Contracts (called AASCs) back in 2019, it expected these arrangements would cost about £4.5 billion over ten years. The plan was to use ‘dispersal housing’, which means placing people seeking asylum in shared houses or flats spread out across the country, avoiding large concentrations in any single place.
However, the NAO’s recent investigation has found that costs are now expected to be more than three times that amount. The NAO projects the total bill over the same period could reach £15.3 billion. So, what has caused such a massive jump?
The Growing Use of Hotels
The biggest reason for the rise is that more people are asking for asylum in the UK 🇬🇧 than there are spaces available in dispersal housing. This shortage meant the government had to start using hotels as a backup—something only meant as a temporary measure, but which has quickly become the main way to house people.
By December 2023, about 45,800 people who were waiting for a decision on their asylum claim were living in hotels. This is nearly half of all people supported by the Home Office’s asylum system at that point—a total of 106,500.
Hotel stays now cost taxpayers much more than other options. Here’s how it breaks down:
- Hotel accommodation accounts for about 35% of everyone being housed, but it represents 76% of the total yearly contract cost.
- In the year ending March 2024, hotels cost the public about £3.1 billion. Out of all spending for asylum support that year (£4.7 billion), hotel use took up most of the budget.
Lack of Control Over Spending
The National Audit Office pointed out that the Home Office has struggled to keep these costs down. Part of the problem is due to the way the contracts work—with limited flexibility to negotiate lower rates, especially when extra spaces are needed urgently.
Attempts to save money, like pushing for more ‘room sharing’ (where unrelated asylum seekers share hotel rooms) or creating new types of accommodation, haven’t reduced costs as planned. In some cases, the alternatives tried—such as using former army bases or special boats—ended up costing even more per person, especially when these places had empty beds.
Why Did Plans to Use Big Accommodation Sites Not Work Out?
The Home Office wanted to cut down on the use of hotels by setting up larger sites that could offer cheaper and more sustainable housing for people waiting on asylum decisions. These included old military bases like Scampton, or vessels like the Bibby Stockholm.
But the effort has hit several stumbling blocks:
- Many of these new large sites have run below their planned capacity. That means costs are higher for each person because buildings and staff are still needed even if some beds are empty.
- Early reports suggest some of these sites may even be more expensive than hotels when not fully used. The NAO made it clear this was a concern, since it means taxpayers aren’t even saving money by moving people out of hotels.
One NAO summary put it this way: “Hotel accommodation accounts for around 35% [of people] but represents a major share—76%—of annual contract costs.” This speaks to just how expensive it has become to keep using hotels as the main solution.
Trying to Improve the Situation
There has been some progress, even if only small steps. Since the end of 2023, the Home Office managed to cut back the number of hotels being used by about 60 (from roughly 400 down to 340). Some of this was done by encouraging room sharing where possible and by putting more effort into finding alternative homes in local communities.
Still, the changes have not been enough to push costs down as hoped. Even with fewer hotels, the bill for asylum accommodation is still much higher than originally forecast. The government’s “Large Sites Programme” (using bigger sites or ships) was supposed to help, but as mentioned, these options have not saved money, especially when not filled to capacity.
What Does the National Audit Office Say Is Likely to Happen Next?
The NAO warns that unless something changes in a big way—like much lower demand for asylum accommodation or a much faster rollout of truly lower-cost homes—the UK 🇬🇧 will continue to face very high spending in this area.
The NAO’s report makes it clear that:
- Projected costs over the ten-year term are now well over three times the first estimate.
- There’s a high risk that costs will stay at these new, higher levels unless the government can find better, cheaper options or unless far fewer people need this help.
- Reviews of government plans show they are “high risk” or “undeliverable.” This means experts think it will be very hard to reach new goals, like getting enough new large sites up and running quickly or keeping future costs under control.
Who Is Affected by These Higher Costs?
The Taxpayer
Ordinary UK 🇬🇧 taxpayers are footing the bill for the rising costs. Funds originally planned for other areas now have to go towards paying for emergency hotel rooms or expensive new sites. Because the costs tripled in just five years, there is very real pressure on government budgets.
Local Communities
Some local communities have said they feel stretched because of extra demand on schools, health services, and housing. At the same time, others have expressed concern about how asylum seekers are being housed, especially when they see hotels being used in busy towns and cities.
People Seeking Asylum
The people waiting for a decision on their asylum application are also impacted. Many must spend long periods in hotels or temporary housing, often in crowded conditions. Reports suggest this can have a bad effect on their mental health and ability to settle into their new lives.
Why Did the Government Use Hotels in the First Place?
Using hotels to accommodate people seeking asylum was originally meant as an emergency measure. The situation changed quickly, with more and more people arriving, leading to a big gap between available homes and the number needing a place to stay.
- Normal homes used for ‘dispersal’ could not keep up with the growing numbers.
- Local councils were not able to rapidly increase the amount of housing they could offer.
- The Home Office had to act fast, so bookings at hotels across the UK 🇬🇧 became the short-term solution.
What began as a backup plan turned into the main method of housing for thousands.
What About the New Contract Types?
The current contracts (AASCs) set the rules for how much is paid for housing, what kinds of homes can be used, and who is responsible for finding and managing housing. When contracts don’t have enough flexibility—such as the ability to change terms quickly or adjust for sudden changes in numbers—costs can go up when something unexpected happens, like a surge in applications.
The NAO noted that the Home Office has few options available when demand rises, so they end up agreeing to emergency rates for hotels or other sites just to make sure nobody is sleeping rough. This means higher daily charges, with little ability to drive down prices.
Why Are Alternative Sites More Expensive Than Expected?
The government hoped that using larger sites or ships would cost less, since more people could be put up in one location. However, if these sites are only half full, the daily cost for each resident rises because resources like food, security, laundry, and staffing are needed whether the beds are full or not.
- Underutilization is a main factor: when a site has empty beds, but daily costs (like utilities and staff pay) remain the same, the cost per person goes up.
- Set-up costs (installing security, kitchens, furniture, health care services) on these sites can be high, especially in the early months.
Can These Costs Be Brought Down in the Future?
The NAO’s findings strongly suggest that unless either the number of people seeking asylum falls or the Home Office succeeds in building more lower-cost accommodation, spending will stay at much higher levels for the next several years.
- Attempts to expand capacity using new types of accommodation need to make sure these sites are actually filled, or the cost per head will stay high.
- Local councils and housing groups will have to work with the Home Office on new arrangements that create more stable, community-based housing.
What Is the Government Doing to Respond?
The Home Office has promised to reduce hotel use as quickly as possible and to find cheaper, more suitable alternatives. Some of the steps taken include:
- Encouraging more shared accommodation where this is safe and possible.
- Working with local authorities to expand dispersal housing beyond areas with a long history of helping asylum seekers.
- Introducing new types of housing contracts for large sites and special vessels.
- Regularly reviewing capacity goals for new sites and making changes if things are not working.
However, the NAO points out that so far, none of these steps has brought the expected drop in spending. Instead, extra costs and delays in getting large sites ready have made things worse in the short term.
What Are the Risks Going Forward?
The risks are clear and serious:
- Spending could stay high and even increase further if more people arrive or if planned sites don’t work out.
- Large sites might stay empty or partly filled, which wastes resources.
- Political and public pressures may lead to more frequent changes in policy, which can increase uncertainty.
- Taxpayers and communities will continue facing the consequences.
Where Can You Learn More?
For readers who want more information about how asylum accommodation is managed and how money is spent, the National Audit Office’s latest report is a detailed and official place to start.
Summary and Next Steps
The UK 🇬🇧 faces a future with much higher asylum accommodation costs unless big changes are made to how housing for people seeking asylum is organised and funded. The National Audit Office has made it clear that the present situation—where hotels are used for long periods and large alternative sites are not fully used—is not sustainable.
For now, the main challenge is how to bring costs down while making sure people seeking asylum have safe, suitable homes and communities can play their part without feeling overwhelmed. Policymakers, the Home Office, and local authorities must keep working on new solutions, knowing that unless things change quickly, these high costs are likely to continue for many years.
Staying informed about how public money is being spent, and about the reasons these costs have grown so much, is important for everyone—from taxpayers to local communities and those who depend on the UK’s asylum system.
Learn Today
Dispersal Housing → Government strategy of placing asylum seekers in shared homes across various locations to prevent overcrowding in specific areas.
Home Office → The UK government department responsible for immigration, security, and law and order, including asylum system administration.
Asylum Accommodation and Support Contracts (AASCs) → Agreements that set rules and costs for UK asylum seeker housing, including responsibilities and allowed housing types.
National Audit Office (NAO) → An independent UK agency reviewing government spending for efficiency, effectiveness, and value for money.
Bibby Stockholm → A large vessel repurposed by the UK government to temporarily house asylum seekers as an alternative to hotels.
This Article in a Nutshell
UK asylum accommodation costs have soared far above expectations, mainly due to the heavy reliance on costly hotels and inefficient large sites. The National Audit Office warns that without dramatic changes or faster solutions, these high expenses will persist, burdening taxpayers, communities, and impacting the wellbeing of asylum seekers themselves.
— By VisaVerge.com
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