The UK government has slashed asylum hotel costs by nearly a third in the past year. According to newly released Home Office accounts, spending dropped from £3 billion to £2.1 billion. This reduction means daily expenses fell from £8.3 million to £5.77 million.
Officials credit the savings to cheaper accommodation and increased room-sharing. The government has prioritized moving families and children out of hotels. Many now live in local housing or shared homes known as HMOs.
Analysis reveals the average nightly asylum hotel costs per person decreased from £162.16 to £118.87. Contract renegotiations and bulk housing deals also contributed. Despite this, experts warn the trend may not last.
Dr. Peter Walsh from the Migration Observatory cautions that rising Channel crossings could force a return to hotels. “Hotels won’t disappear soon,” he said. Currently, 32,345 asylum seekers remain in hotels, down from last year’s peak but still high.
The Home Office has closed 71 hotels since March 2024. A senior source confirmed that Serco, a housing contractor, helped relocate many individuals. Room-sharing in larger spaces also played a role in cutting expenses.
Meanwhile, the government wrote off £48.5 million after scrapping plans to house asylum seekers at RAF Scampton. Officials argued that continuing the project would have been costlier than hotels.
Additionally, Rwanda retained £270 million from the UK after the asylum deal collapsed. The scheme, designed to deter Channel crossings, resulted in only four voluntary deportations.
While asylum hotel costs have declined, challenges remain. Rising arrivals and limited housing options could strain budgets again. For now, the focus remains on finding sustainable alternatives to hotel stays.
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