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Billions of pounds have been squandered refuge hotel contract thanks for doing home office Mismanagement and incompetence, a major report has found.
Ministers and civil servants have become increasingly dependent on the expensive use of hotels for shelter accommodation, Making large contracts for providers With little accountability or oversight, MPs Home Affairs Committee Have warned.
In a damning new report published on Monday, MPs said the estimated cost of Home Office asylum accommodation contracts has more than tripled from £4.5 billion to £15.3 billion between 2019-2029.
The report found that millions of pounds in excess profits are owed to the government by two accommodation providers, but the Home Office has not yet reclaimed this money.
Chairman of the Home Affairs Committee, Dame karen bradley“Urgent action is needed to reduce the cost of asylum accommodation and address the concerns of local communities,” it said.
After this, in the summer, migrant hotels became the main center of protest. An asylum seeker was sexually assaulted in Epping, Essex A 14 year old girl. Epping Council demanded the closure of the hotel due to them Legal battle till High Court.
Dame Karen said: “The Home Office has presided over a failing asylum accommodation system that has cost taxpayers billions of pounds.” He warned ministers against making “unbelievable promises to appeal to popular sentiment”, such as promising End hotel use by 2029.
He accused the Home Office of being unable to make long-term plans, saying: “It has instead focused on short-term, reactive responses.”
By June 2025 the Home Office was housing approximately 103,000 people. While the number of asylum seekers in hotels has declined compared to the peak, there were 32,059 people in this accommodation in June, still more than the previous year.
Sixty percent of asylum seekers staying in hotels are in the south of England, with the value of 10-year accommodation contracts for the region increasing by £0.7bn to £7bn since 2019.
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Demand for migrant hotel accommodation increased in 2020, due to the growing asylum backlog associated with the pandemic. The Home Office negotiated changes to the contracts with the providers to require them to deliver hotels, which were significantly more expensive than the multiple occupancy (HMO) flats and houses that the providers were sourcing.
The average cost of a person staying one night in an asylum hotel is £144.98, compared to £23.25 in dispersed accommodation such as an HMO. According to then-Home Secretary Yvette Cooper, the hotel contracts were “hastily signed in the summer of 2022”, as the government was struggling to find space for destitute asylum seekers.
The MPs concluded that the use of hotels had now become a “widespread and embedded part of the asylum accommodation system”.
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Current refuge accommodation and support contracts are delivered by Serco, Clearsprings and Mears. Australian travel firm CTM, which runs the controversial Bibby Stockholm migrant barge, also has a recent £550m hotel accommodation contract with the government, which was not scrutinized by the committee.
MPs said the Home Office’s failure to get hold of contracts as demand for hotels increased was “disorganized and resulted in significant costs to the taxpayer”.
The Home Affairs Select Committee said, “We find this incompetence unacceptable.” He added: “The basic elements of oversight have been ignored during these contracts.”
MPs said the Home Office has focused on “pursuing high-risk, poorly planned policy solutions”, such as the Tories’ failed Rwanda plan, and “ignoring the day-to-day work of effectively monitoring asylum accommodation contracts”. This “increased costs”, with civil servants failing to “do basic due diligence”, particularly with larger asylum sites.
Independent Is Previously revealed how Home Office officials were in charge of asylum hotel contracts They were unaware of who was actually providing vital services in the hotel where an asylum seeker had died.
Senior Home Office officials heard about the investigation into the death of Colombian migrant Victor Hugo Pereira Vargas In-charge of shelter home, And the person in charge of managing the hotel contract in question did not know who was actually an employee at the hotel.
Freedom of information data shared Independent Too Turns out there are hundreds of complaints Three home office accommodation providers, Mears, Clearsprings Ready Homes and Serco, have been created.
Data shows that 620 complaints from asylum seekers were sent to Serco in 2024, 592 complaints ClearSprings and 264 to Mears.
MPs also warned that children are still being wrongly placed in adult accommodation due to inaccurate age assessments.
The selection committee cautioned against turning to larger sites such as former military bases as alternative accommodation, as these are more expensive than hotels.
Enver Solomon, CEO of the Refugee Council, said: “Everyone agrees that the Home Office’s reliance on hotels is a serious failure: they have cost taxpayers billions, falsely implicated people, and become a lightning rod for division. As this report proves, hotels are particularly unsuitable for children and vulnerable people who need responsible protection.”
Sile Reynolds, at the charity Freedom from Torture, said the government should take action to reduce pressure on hotels by “making better quality and faster asylum decisions, including faster granting status to people from countries such as Syria and Sudan where they are almost always recognized as refugees”.
A Home Office spokesperson said: “The Government is furious at the number of illegal immigrants in this country and the number of hotels in them. So we will close every single asylum hotel – saving taxpayers billions of pounds.”
“We have already taken action – closing hotels, cutting asylum costs by almost a billion pounds and exploring the use of military bases and disused properties.”