The Home Office will announce the closure of 11 asylum hotels this week as part of its pledge to close all hotels by the end of this Parliament.
The use of hotels to house asylum seekers has been controversial since it became widespread at the start of the Covid pandemic. Anti-immigrant protesters have demonstrated outside hotels claiming asylum seekers are living a life of luxury in the hotels.
According to the government, about 200 hotels are in use, accommodating 30,000 asylum seekers. The remainder – more than 70,000 people – live in other types of housing such as shared housing or military barracks.
Some protests turned violent, such as in Rotherham in August 2024, when protesters tried to set fire to a hotel housing asylum seekers. Refugee NGOs say the hotels are unsuitable for long-term accommodation, and a parliamentary inquiry found the government has wasted billions on a “failing, chaotic and expensive system”. In evidence to the inquiry, the Red Cross said it had to take £220,000 from its disaster fund to clothe asylum seekers staying in hotels, some of whom had scabies.
The Home Office is to hold a private event this week, which it describes as an “industry day” for current and potential future providers of asylum accommodation. The department is not disclosing the details of time and venue till the last minute and participants will have to sign an NDA.
The meeting related to the re-tendering of asylum contracts from 1 September 2029 to 31 August 2036, with a possible option to extend to 31 August 2039. new contract, Known as Future Asylum Contracts Accommodation, it is worth around £10 billion and aims to move away from reliance on hotel accommodation. Senior sources within the Home Office’s current housing providers have raised concerns that the new contracts will significantly increase the number of contractors, leading to inefficiencies and greater costs to taxpayers.
The Home Office uses a portion of its foreign aid budget to finance asylum accommodation in a practice known as “donor refugee costing”. These costs fall from £2.8 billion in 2024 to £2.4 billion in 2025.
However, Gideon Rabinowitz, director of policy and advocacy at BOND, a UK network of NGOs working in international development, condemned the government for spending a portion of the aid budget on asylum seekers in the UK and said that while asylum seekers should be supported here, the money should come from the Home Office budget.
“Funding to support communities facing conflict and crisis around the world is set to fall by more than £1 billion in 2025, as 18% of the budget continues to cover asylum costs in the UK,” Rabinowitz said.
“Life-saving humanitarian programmes, including education provision in Syria and healthcare programs across Africa, have already been forced to close, and more cuts are set to be implemented this year and next, with the worst consequences yet to be felt.”
A Home Office spokesperson said: “This Government is removing the incentives that attract illegal immigrants to the UK and accelerating the removal of people who have no right to be here.
“That is why we are closing every asylum hotel and moving asylum seekers into basic accommodation, including ex-military sites.
“The population in asylum hotels has fallen by almost 20% last year and by 45% since the peak under the previous government – cutting costs by almost £1 billion.”
