Home Office 'squandered' billions on migrant hotels, damning report reveals

The Government has vowed to end the housing of asylum seekers in hotels by 2029, a move that comes amid mounting pressure over rising costs and a backlash among local communities.

But doing so without a clear plan for alternative accommodation sees Labour risk “under-delivery and consequently undermining public trust still further”, the Home Affairs Committee has warned.

It accused the Home Office of a "chaotic" strategy when it comes to asylum seeker accommodation, claiming it has repeatedly cut corners as in a bid to address the country's immigration crisis at a huge cost to the taxpayer.

In fact, Home Office accommodation contracts for 2019-2029 have tripled from £4.5 billion to £15.3 billion, after a “dramatic increase” in demand following the pandemic and rising numbers of those arriving by small boat among the factors.

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“The Home Office has undoubtedly been operating in an extremely challenging environment but its chaotic response has demonstrated that it has not been up to the challenge," the report said.

“The 2026 break clause and end of the contracts in 2029 represent opportunities to draw a line under the current failed, chaotic and expensive system and move to a model that is more effective and offers value for money,” it added.

It comes after protests over the use asylum hotels descended into violence over the summer, with several flare-ups around the Bell Hotel in Epping after a migrant was charged and later jailed for sexual assault.

The same migrant, Ethiopian national Hadush Kebatu, was released from prison in error on Friday and re-arrested on Sunday morning following a three-day manhunt.

The MPs’ report said protests at asylum sites have involved local residents with “genuine concerns”, as well as people travelling from other areas “to promote divisive agendas or instigate disorder”.

MPs pressed for the Home Office to prioritise closing hotels where there have been “significant community cohesion issues”, as well as hotels in remote areas that can place the most pressure on local services.

The committee said the Home Office’s failure to engage with communities has led to missed opportunities to address local concerns.

The report added: “The lack of engagement and transparency has left space for misinformation and mistrust to grow, which in too many areas has led to tensions and undermined the ability of local partners to promote social cohesion.”

The report revealed how the Government’s approach has led to an uneven distribution of asylum accommodation around the country, often concentrated in areas of high deprivation.

The committee called for a future accommodation system to be based on fairness rather than cost alone, improve communication with local communities and be flexible to meet unpredictable demands.

“The Government needs to get a grip on the asylum accommodation system in order to bring costs down and hold providers to account for poor performance," chairwoman of the Home Affairs Committee, Dame Karen Bradley, said.

She added: “While reducing hotel use is rightly a Government priority, there will always be a need for flexibility within the system, and the Home Office risks boxing itself in by making undeliverable promises to appeal to popular sentiment. It shouldn’t set itself up for more failure.

“The Home Office has not proved able to develop a long-term strategy for the delivery of asylum accommodation. It has instead focused on short-term, reactive responses.

“The Home Office must finally learn from its previous mistakes or it is doomed to repeat them.”

The report also raised how the department neglected its day-to-day management of the contracts, and had not sufficiently ordered financial penalties for providers who have poor performance.

This includes no fines for failures at hotels and the large accommodation sites at Napier Barracks and Wethersfield, despite hotels making up more than 75% of spending on asylum accommodation.

Excess profits from providers totalling tens of millions of pounds owed to the Home Office are yet to be reclaimed by the department.

The committee said the money should be used on public services, “not sitting in the bank accounts of private businesses”.

MPs said they had heard about “too many cases” where asylum accommodation was inadequate and safeguarding concerns about vulnerable people living there had not been addressed.

Reacting to the report, charity Freedom From Torture said for torture survivors, living in asylum accommodation makes rebuilding their lives “almost impossible”.

The charity’s head of advocacy, Sile Reynolds, said: “Everyday Freedom from Torture therapists see first-hand the devastating impact that hotels, military sites and shared bedrooms have on people who came to this country seeking safety.

“Living in fear, without privacy, stability, or access to proper healthcare, strips people of their dignity and undermines their recovery.

“The Government now has a crucial opportunity to once and for all transform our asylum accommodation system so that it is safe, dignified and based in our communities.”

A Home Office spokesperson said: “The Government is furious about the number of illegal migrants in this country and in hotels.

“That is why we will close every single asylum hotel – saving the taxpayer billions of pounds.

“We have already taken action – closing hotels, slashing asylum costs by nearly £1 billion and exploring the use of military bases and disused properties.”