Parliamentarians have accused the British government of wasting billions in the mismanagement of the deeply controversial scheme to house supposed asylum seekers in hotels across the country at taxpayer expense.
A report from the Home Affairs Committee in the House of Commons found that government incompetence has been a major driver of the surging costs of asylum accommodation contracts signed in 2019 under the previous Conservative government, which have ballooned from £4.5 billion to £15.3 billion.
“Failures of leadership at a senior level, shifting priorities, and political and operational pressure for quick results meant that the department was incapable of getting a grip on the situation, and allowed costs to spiral,” the report found. “The Home Office has repeatedly cut corners and wasted considerable amounts of taxpayers’ money, and is once again under pressure to act quickly to bring down the use of the hotels.”
MPs reported that although the number of migrants in hotels has decreased from its peak of 56,042 in September 2023, the use of hotels has been on the rise under the leftist Labour government of Sir Kier Starmer, increasing by eight per cent from June 2024 to June 2025 to 32,059 people.
The report found that the current scheme, in which the government has contracted firms such as Clearsprings Ready Homes, Mears, and Serco to block-book hotels to house mostly illegal young males, has financially incentivised the private contractors to use hotels rather than cheaper, alternative migrant accommodations.
Indeed, the average cost of housing a migrant in a hotel this year was £145 per night, compared to £23.25 for other private housing options.
Under the Tory-negotiated deals, any profits accumulated by the firms over five per cent should be shared with the Home Office. However, the report noted that this can be effectively skirted through the use of subcontractors, typically the hotel themselves, who are not bound by such clauses.
“We have seen no evidence that the Home Office has maintained adequate oversight of subcontracting arrangements,” MPs said, adding: “Performance management of providers and subcontractors delivering contracts worth billions of pounds was neglected.”
Additionally, the report found that the Home Office has so far failed to recoup nearly £46 million in excess profits over the past six years from Clearsprings and Mears, stating that the money “should be supporting public services not sitting in the accounts of private businesses”.
“We are frustrated that the Home Office has left itself without a mechanism to prevent providers making excessive profits as the contract value has increased, largely due to the ongoing use of hotels,” lawmakers said.
While the government has claimed it intends to scrap the migrant hotel scheme by 2029, the MPs argued that the government should use the 2026 break clause in the ten-year contracts as an “opportunity to draw a line under the current failed, chaotic and expensive system and move to a model that is more effective and offers value for money.”
Meanwhile, the Home Affairs Committee went on to find that the scheme has seen asylum accommodation “clustered” in areas with “high levels of deprivation, where accommodation is cheaper,” meaning that working-class areas of the country have been forced to bear a disproportionate burden.
The report argued that the Home Office should “prioritise the closure of manifestly unsuitable hotels—such as those in remote areas and near limited infrastructure—that cause the most harm to their residents and place the most pressure on local services, and also the closure of hotels in areas that have experienced significant community cohesion issues.”
The use of hotels to house migrants, many of whom are military-aged males who arrive in the country illegally, sparked a wave of protests over the summer following the sexual assault of a 14-year-old girl by an Ethiopian alien housed in a migrant hotel in Epping. Although the protest movement appeared to have won a victory by securing a High Court injunction to shut down the hotel as migrant accommodation, the government later won on appeal to keep it open, successfully arguing that the right of asylum seekers to be housed on the taxpayer’s dime trumped local concerns over safety.
Commenting on the findings of the report, Home Affairs Committee chairwoman Dame Karen Bradley said per The Times: “The Home Office has presided over a failing asylum accommodation system that has cost taxpayers billions of pounds.
“Its response to increasing demand has been rushed and chaotic, and the department has neglected the day-to-day management of these contracts. The government needs to get a grip on the asylum accommodation system in order to bring costs down and hold providers to account for poor performance.”
The Home Office replied: “The government is furious about the number of illegal migrants in this country and in hotels. That is why we will close every single asylum hotel, saving the taxpayer billions of pounds. We have already taken action: closing hotels, slashing asylum costs by nearly a billion pounds and exploring the use of military bases and disused properties.”
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