A controversial new government scheme will see asylum seekers housed in newly built or refurbished council properties, in a bid to move away from expensive and controversial hotel accommodation. The pilot programme has already drawn interest from around 200 local authorities, with five councils confirming their participation.
Pilot Scheme Aims to Cut Costs and Hotel Reliance
The initiative, backed by a £100 million government pledge, is designed to reduce the reliance on private contractors who lease hotels and private rentals for asylum accommodation. Council leaders, particularly from Labour-run areas, argue the current system is wasteful. Bella Sankey, leader of Brighton and Hove City Council, stated that taxpayer money is being "creamed off for handsome profits by private companies."
Official data underscores the scale of the current system: 36,000 asylum seekers are in hotels, with a further 71,000 in 'dispersal' accommodation within the private rented sector. The cost of contracts with firms like Serco, Clearsprings, and Mears has ballooned from £4.5 billion to £15.3 billion for the decade up to 2029, according to the National Audit Office.
Public Fury Amid a Deepening Housing Crisis
The proposals are anticipated to provoke significant public anger, as they collide head-on with a severe shortage of affordable housing for UK residents. Last year, 1.3 million people were on social housing waiting lists across England – a 3% rise from 2023 and the highest figure since 2014.
Critics point out that supply is moving in the wrong direction. In the 2023/24 period, 20,560 social homes were lost, primarily through Right to Buy sales and demolitions. Research indicates England will sell off more than eight times as many council homes in 2025/26 as were built the previous year.
The five councils that have publicly confirmed interest in the asylum housing pilot are:
- Brighton and Hove
- Hackney
- Peterborough
- Thanet
- Powys
How the New Asylum Housing Model Would Work
Under the proposed scheme, councils would receive government funds to purchase properties specifically for asylum seeker accommodation. This could include buying homes in new developments that are struggling to find buyers. These properties would then be leased back to the Home Office for asylum housing.
Crucially, after their use for asylum accommodation, the homes would eventually be added to the council's permanent stock of social housing. Council leaders like Ms. Sankey champion this as a "win-win," suggesting it could deliver around 900 new homes and, over time, eliminate the need for private contractors in the asylum system altogether.
This model directly responds to a Home Office report that identified billions of pounds being "squandered" on asylum accommodation. The scheme's supporters insist it will provide long-term savings for the taxpayer while creating a more stable and integrated housing solution. However, it places local authorities at the centre of a highly charged national debate on immigration and housing scarcity.
