Home Office squandered billions on asylum hotels, MPs say

Published: 27 October 2025. The English Chronicle Desk. The English Chronicle Online.

The Home Office has come under intense scrutiny after a damning parliamentary report accused it of “squandering” billions of pounds in taxpayers’ money on asylum accommodation. The Home Affairs Committee, in a detailed investigation, found that deeply flawed contracts and repeated managerial failures left the department unable to cope with rising demand, forcing it to rely on hotels as the “go-to solution” rather than as short-term emergency measures.

According to the committee, the overall cost of housing asylum seekers has tripled to more than £15 billion, with much of the expenditure wasted through mismanagement, poor oversight, and contracts that heavily favoured private accommodation providers. The MPs also said that millions in excess profits made by suppliers have still not been recovered by the department.

In response, a Home Office spokesperson said the government shared public anger about the issue. “We are furious about the number of illegal migrants in this country and in hotels,” the spokesperson said, reaffirming the government’s commitment to end the use of hotels for asylum accommodation by 2029.

Currently, almost 103,000 asylum seekers are being housed by the government, of which around 32,000 — nearly a third — are accommodated in 210 hotels across the UK. These arrangements are governed by regional contracts signed in 2019 under the previous Conservative government, which run until 2029. The contracts permit “contingency accommodation,” such as hotels, when demand exceeds supply. However, the MPs said this provision was never meant to become a permanent feature of the asylum system.

The report described the hotel-based system as expensive, inefficient, and damaging both to local communities and to the wellbeing of asylum seekers. It found that flawed procurement and “incompetent delivery” meant that the Home Office failed to anticipate a surge in arrivals or manage its resources effectively. The expected cost of accommodation contracts for the decade between 2019 and 2029 has ballooned from an initial £4.5 billion to £15.3 billion, the committee said.

The Home Affairs Committee chair, Dame Karen Bradley, speaking to BBC Radio 4’s Today programme, said: “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.”

She added that “failures of leadership at a senior level” had left the Home Office “incapable of getting a grip on the situation.” According to Dame Karen, the department neglected the day-to-day management of the contracts, instead adopting “short-term, reactive responses” that compounded the crisis. She further noted that “the skills needed to manage these contracts simply were not present in the Home Office when they were drawn up.”

The committee acknowledged that external factors, including the COVID-19 pandemic and the sharp increase in small boat crossings in recent years, added pressure to the system. However, it concluded that these challenges exposed rather than caused the department’s dysfunction. The report also pointed to decisions made under the previous Conservative government — such as delaying asylum processing to prioritise its controversial Rwanda deportation plan — as contributing factors to the backlog and rising costs.

While the report accepted that the Home Office operates in a “challenging environment,” it said the department’s “chaotic response has demonstrated that it has not been up to the challenge.” MPs on the committee said they had received numerous accounts of inadequate housing conditions, poor sanitation, and unaddressed safeguarding risks, particularly affecting vulnerable individuals, including children and victims of trafficking.

Housing Secretary Steve Reed described the findings as “shocking” and accused the previous government of “pouring taxpayers’ money down the drain.” He said the current Labour administration was reviewing more cost-effective accommodation alternatives, including the use of disused military sites and longer-term rental properties. “Military bases represent the least expensive option available to house asylum seekers,” he said, adding that a new announcement on the matter would be made “within weeks.”

Two such sites — MDP Wethersfield, a former RAF base in Essex, and Napier Barracks in Kent — are already being used to house asylum seekers, having first opened under the Conservatives. Reed suggested that similar facilities could be expanded or repurposed to reduce dependence on hotels.

Dame Karen welcomed the shift in approach but warned that lessons from past mistakes must be learned. “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 its formal response to the committee’s findings, the Home Office said it had already taken significant steps to cut costs and phase out hotel use. “We have already taken action — closing hotels, slashing asylum costs by nearly £1 billion, and exploring the use of military bases and disused properties,” a spokesperson said.

However, the government continues to face public unrest over asylum housing. Several protests and counter-protests have erupted across the UK this year, most notably in Epping over the summer, where an asylum seeker housed at The Bell Hotel was charged with two sexual assaults. Local residents and activists clashed over the government’s approach, underscoring the deep divisions and tensions surrounding the issue.

As the committee’s findings reverberate through Westminster, questions remain about whether the Home Office can restore public trust and rebuild a fair, efficient, and sustainable asylum system. The report has reignited debate over accountability, fiscal responsibility, and the long-term future of the UK’s immigration management — all while thousands continue to wait in limbo in hotel rooms across the country.