The cost of housing asylum seekers in the UK is set to triple, far surpassing initial government estimates, according to a new report.
In 2019, the Conservative government signed contracts worth £4.5 billion over ten years with three companies—Serco, Mears, and Clearsprings. However, the National Audit Office (NAO) now projects the total cost will hit £15.3 billion.
The NAO, commissioned by Parliament’s Home Affairs Select Committee, warned that ministers have “few levers” to control soaring expenses. The rise in asylum seekers housed in hotels has driven most of the increase.
The number of asylum seekers in paid accommodation surged from about 47,000 in December 2019 to 110,000 by December 2024. Notably, three-quarters of the accommodation budget now goes toward hotels, even though hotels house only a third of asylum seekers.
Private companies may profit more from hotels than other housing types, the NAO noted. Between September 2019 and August 2024, Serco, Mears, and Clearsprings together earned £383 million in profit from these contracts.
Clearsprings’ contract in the south of England is a major factor in the rising costs, ballooning from £0.7 billion to an expected £7 billion. Graham King, the founder and director of Clearsprings, has previously donated to the Conservative Party through other companies he controls.
The yearly cost of asylum accommodation is now projected to surpass the amount the government hopes to save from cutting the winter fuel payment for pensioners.
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