New figures reveal that the cost of accommodating asylum seekers will be significantly higher than previously estimated by the Home Office. Initially projected to be £4.5bn over a decade, contracts signed by the Conservative government in 2019 have now ballooned to a staggering £15.3bn, according to a report by the National Audit Office (NAO).
The rise in costs, largely driven by the surge in asylum seekers housed in hotels, has left ministers with limited control over expenditures. The NAO report also highlights that the average yearly cost of asylum accommodation is expected to surpass the savings hoped to be achieved by cutting winter fuel payments.
The report commissioned by Parliament’s Home Affairs Select Committee indicates a significant increase in the number of asylum seekers residing in paid-for accommodation, rising from approximately 47,000 in December 2019 to 110,000 in December 2024. Despite hotels accommodating only a third of asylum seekers, three-quarters of the funds allocated for asylum accommodation are funneled into hotel stays.
The three companies awarded contracts – Serco, Mears, and Clearsprings – have collectively made a profit of £383m between September 2019 and August 2024. Clearsprings’ contract in southern England has seen the most substantial cost escalation, soaring from £0.7bn to an anticipated £7bn. Additionally, the founder of Clearsprings, Graham King, who has previously donated to the Conservative Party, has come under scrutiny amid these revelations
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