The Home Office spent £23 million on a nine-month contract for the Atrium hotel near Heathrow to house asylum seekers last summer, only to find it was not required, according to a National Audit Office review of the department's accounts.
The review details how in August 2025 the Home Office "procured the Atrium hotel in London on a nine-month contract" because it "anticipated a surge in demand" that threatened to overwhelm the processing site at former RAF Manston. However, the "hotel was never required, resulting in a constructive loss of £23 million."
Political reaction to the wasted contract
The loss has been condemned by the Conservatives, who say the "bill works out at more than £84,000 for every day of a contract for a hotel the department never needed." The Atrium today boasts "573 ultra-chic rooms" and "exceptional dining," offering "everything you need for a restful, refined stay in London."
The audit report also records that the Home Office spent £3.7 billion on asylum in 2025-26 against a budget of £3.6 billion. It sets out how costs have radically exceeded initial expectation: "In 2019 the Home Office estimated that the asylum accommodation contracts would cost £4.5 billion over 10 years. In 2024, this estimate increased to £15.3 billion, due to more people seeking asylum being accommodated in hotels than expected."
Calls to revive the Rwanda plan
Shadow Home Secretary Chris Philp said: "Labour promised to close the asylum hotels and yet keep signing contracts for new ones, including the Atrium which it said it never even needed. People are sick of illegal immigrants being foisted on them – whether accommodated in expensive hotels, flats, or military sites."
He pledged a Conservative government would "deport every illegal immigrant, leaving the ECHR and any other obligation that stands in the way in order to get it done, because the surest way to empty the accommodation is to make plain that nobody who crosses the Channel gets to stay."
Former Home Secretary Dame Priti Patel also called for a revival of the Rwanda plan. She said: "Instead of deporting them, Labour keeps splashing out on asylum hotels and accommodation for illegal migrants… Rather than wasting time and money appeasing their Lefty friends defending illegal migrants, Labour should listen to the British people and deport everyone entering Britain illegal to Rwanda."
Criticism from refugee and taxpayer groups
Imran Hussain of the Refugee Council argued that hotels were not the right location for refugees, saying: "People seeking asylum are not allowed to work so the Government has a duty to provide temporary accommodation for people until their cases are decided. But hotels are unsuitable places for refugees, are hugely costly and have become flashpoints for communities and a magnet for the Far Right. The Government deserves credit for halving the numbers in hotels in the past year, but sending people to large former military sites has been tried before and failed. The best way to support people while they await an asylum decision is in temporary Home Office accommodation in communities, as we have been doing for many years."
John O'Connell, chief executive of the TaxPayers' Alliance, said: "Taxpayers will be furious that the Home Office managed to blow £23 million on an asylum hotel it never even needed. Hard-working families are being told to tighten their belts while the government squanders thousands of pounds a day on unnecessary migrant accommodation. Ministers need to end this farce and treat taxpayers' money with the respect it deserves."
A Home Office source said: "The Conservatives created the asylum hotels policy, and spent £5 billion a year on asylum support. This Government is closing every single asylum hotel, has already saved £1 billion, and has cut small boat crossings by around 40%. We don't need lessons from Chris Philp – a failed former Home Office minister from the Tory Government that left this mess behind."
