The Home Office is set to announce the closure of 11 asylum hotels this week as part of its pledge to end the use of all such facilities by the end of this parliament. The use of hotels for housing asylum seekers has been controversial since it became widespread at the start of the Covid pandemic, with anti-migrant protests and concerns over suitability.
According to the government, nearly 200 hotels are currently in use, accommodating around 30,000 asylum seekers. A further 70,000 people live in other types of accommodation, such as 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.
Refugee NGOs have long argued that hotels are unsuitable for long-term accommodation. A parliamentary investigation found that the government had squandered billions on a “failed, chaotic and expensive system”. The Red Cross reported having to take £220,000 from its disaster fund to clothe asylum seekers in hotels, some of whom had contracted scabies.
The Home Office is holding a private “industry day” this week for current and potential future providers of asylum accommodation, with details kept confidential and attendees required to sign a non-disclosure agreement. The meeting relates to the re-tendering of asylum contracts from September 2029 to August 2036, valued at approximately £10bn, aiming to move away from hotel reliance. However, senior sources among current providers have raised concerns that the new contracts could increase inefficiency and cost taxpayers more.
The government uses part of the overseas aid budget to fund asylum accommodation through “in donor refugee costs”, which fell from £2.8bn in 2024 to £2.4bn in 2025. Gideon Rabinowitz, director of policy and advocacy at Bond, criticised this practice, noting that funding for communities facing conflict and crisis worldwide fell by over £1bn in 2025 as 18% of the budget was diverted to cover asylum costs in the UK. He warned that life-saving humanitarian programmes have already been forced to close.
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.”
