UK Home Office squandered billions of pounds on asylum hotels: MPs

The Home Office has "squandered" billions of pounds of taxpayers' money on asylum accommodation, according to a report by a committee of MPs.
The Home Affairs Committee said "flawed contracts" and "incompetent delivery" left the department unable to cope with a surge in demand and it relied on hotels as "go-to solutions" instead of temporary stop-gaps, reports BBC.

The MPs said expected costs had tripled to more than £15bn and not enough had been done to recoup excess profits.

Prime Minister Sir Keir Starmer said he was "determined" to close all asylum hotels adding: "I can't tell you how frustrated and angry I am that we've been left with a mess as big as this by the last government."

The prime minister said the Home Office was processing asylum claims "much more quickly" and removing those with no right to be in the country "at a higher rate than the best part of a decade".

Just under 103,000 asylum seekers are being housed by the government, of which just over 32,000, around a third, are accommodated in 210 hotels.

Asylum accommodation is currently delivered through a series of large-scale, regional contracts agreed by the previous government with a number of private providers, which started in 2019 and will expire in 2029.

They allow for the use of "contingency accommodation" - usually hotels - when demand exceeds supply, but state that these should only be used on a short-term basis.

The report said the current system for housing people seeking asylum - with its reliance on hotels - was expensive, unpopular with local communities and unsuitable for the asylum seekers themselves.

The report said the contracts drawn up for accommodation providers under the Conservatives had been flawed and that "inadequate oversight" had meant failings went "unnoticed and unaddressed".

Expected costs for hotel contracts from 2019-2029 have risen from £4.5bn to £15.3bn, while two accommodation providers still owe millions in excess profits that the Home Office has not recovered, the report found.

The report said the department neglected its day-to-day management of the contracts, and had not sufficiently ordered financial penalties for providers who have poor performance.