A cross-party committee of MPs has condemned the Home Office for squandering billions of pounds on asylum accommodation, describing the system as 'failed, chaotic and expensive'. The Commons home affairs committee report, published on Monday, highlights long-term mismanagement of hotels, large sites like the former Wethersfield military base in Essex, and shared housing.
The report finds the Home Office 'incapable of getting a grip on the situation' and identifies 'failures of leadership at senior level'. It raises concerns about financial mismanagement of 10-year contracts with private providers Clearsprings, Mears and Serco, which began in 2019. The contract value tripled from £4.5bn to £15.3bn, with failings going unnoticed due to inadequate oversight.
Despite hotels accounting for over 75% of asylum accommodation spending, no performance penalties were applied to hotels, Napier barracks, or Wethersfield. Under a profit-share agreement, Mears owes £13.8m and Clearsprings £32m, but the Home Office has yet to complete the necessary audit. The report also highlights significant safeguarding failings, including children wrongly age-assessed as adults and placed in adult accommodation.
Specific financial failings include the purchase of the Northeye estate in Bexhill for £15.4m in September 2023, when it had been sold for £6.3m a year before; the site was later found contaminated and unused. The Home Office spent £48.5m on RAF Scampton but cancelled the plan due to soaring costs. A taskforce found 244 bed spaces charged for that did not exist. Hundreds of millions were wasted on the Rwanda scheme, including £290m paid to the Rwandan government, with only four volunteer asylum seekers ever going there.
The average cost of shared asylum housing per night is £23.25, compared to £144.98 for a hotel place. Steve Lakey, managing director of Clearsprings, told the committee hotels were more profitable, creating 'a great disincentive' to move people out. Dame Karen Bradley, committee chair, urged the Home Office to learn from past mistakes and develop a long-term strategy, rather than focusing on short-term, reactive responses.
A Home Office spokesperson said the government is 'furious about the number of illegal migrants in this country and in hotels' and will close every asylum hotel, saving taxpayers billions. They claimed action has already been taken, including closing hotels and slashing asylum costs by nearly £1bn. A British Red Cross spokesperson said the report confirms what they have long seen.
