Ending Hotel Asylum: The UK’s Bold Plan to Save £1 Billion by 2029
The UK government is determined to phase out the use of hotels for accommodating asylum seekers by 2029, a decision unveiled by Chancellor Rachel Reeves during her Spending Review. This initiative is projected to save taxpayers £1 billion annually. Reeves announced an allocation of £200 million aimed at addressing the asylum backlog, expediting appeal cases, and repatriating individuals with no right to remain in the UK.
The government’s strategy to eliminate hotel accommodations involves reducing small boat crossings and constructing new, government-owned facilities for migrants. This move follows a concerning forecast from the National Audit Office (NAO), which indicated that asylum housing costs could escalate to £15.3 billion over ten years—three times the Home Office’s existing budget.
Chris Philp, the Conservative shadow home secretary, criticized the plan, claiming it relied on the unrealistic premise that hotels would effectively self-empty. He emphasized the lack of a concrete plan for where migrants would be relocated.
As part of the government’s exploration of new housing options for asylum seekers, Dame Angela Eagle, a Home Office minister, noted that purchasing tower blocks and former student accommodations is under consideration. This coincides with forthcoming break clauses in major accommodation contracts. Reeves assured MPs that her government intends to accelerate efforts to reach this goal during the current Parliament, reinforcing that the allocated funding will be pivotal in addressing asylum system reforms by 2026-27.
Additional funding of £150 million has been earmarked for those planned reforms in 2026-27, with an extra £50 million added for 2027-28 from the £3.25 billion Transformation Fund. The government anticipates that such reforms will decrease asylum costs significantly, estimating a £1 billion reduction by the end of 2028-29 compared to the financial outlook for 2024-25.
The report underscored that hotels were initially meant as contingency accommodations for asylum seekers when no other options were available. However, since 2020, the reliance on hotels has surged due to escalating asylum backlogs, a scarcity of housing, and increasing rental prices. This year, the government has spent approximately £1.3 billion on hotel accommodations, covering 76 percent of total asylum housing costs, with about 32,000 asylum seekers currently residing in hotels—slightly down from the previous year.
The chairwoman of the home affairs committee, Dame Karen Bradley, highlighted the staggering rise in costs associated with asylum hotels, stressing the need for ongoing access to short-term accommodation in light of uncertain migration levels. She cautioned that without real savings, broader objectives related to policing, immigration, and counter-terrorism could be compromised.
Additionally, the chancellor’s review proposed up to £280 million per year to bolster the Border Security Command, enhancing the UK’s strategy against people smuggling and irregular migration. These developments signal a critical shift in the UK government’s approach to handling asylum seekers and underline the pressing need for effective solutions amidst ongoing challenges.