The Home Office is set to announce the closure of 11 hotels used to house asylum seekers this week, as part of a pledge to end the use of all such facilities by the end of the current parliament. The use of hotels for asylum accommodation has been controversial since it expanded during the Covid-19 pandemic, sparking protests and criticism from refugee NGOs.
Currently, nearly 200 hotels accommodate around 30,000 asylum seekers, while over 70,000 others live in shared housing or military barracks. Some protests have turned violent, including an incident in Rotherham in August 2024 where protesters attempted to set fire to a hotel housing asylum seekers. A parliamentary investigation described the system as “failed, chaotic and expensive,” and the Red Cross reported spending £220,000 from its disaster fund to clothe asylum seekers in hotels, some of whom had contracted scabies.
The Home Office will hold a private “industry day” this week for current and potential future providers of asylum accommodation. The meeting relates to the re-tendering of contracts from September 2029, valued at approximately £10 billion, aiming to move away from hotel reliance. However, senior sources have raised concerns that the new contracts could increase inefficiency and costs.
The government uses part of the overseas aid budget to fund asylum accommodation, a practice known as “in-donor refugee costs.” These costs fell from £2.8 billion in 2024 to £2.4 billion in 2025. Gideon Rabinowitz of Bond criticised this diversion, noting that life-saving humanitarian programmes have been forced to close as a result.
A Home Office spokesperson said: “This government is removing the incentives drawing illegal migrants to Britain and ramping up removals of those with no right to be here. That is why we are closing every asylum hotel and moving asylum seekers into basic accommodation including ex-military sites. The population in asylum hotels has fallen by nearly 20% in the last year and by 45% since the peak under the previous government, cutting costs by nearly £1bn.”
