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A significant decrease in government spending on hotels for asylum seekers was reported between April 2024 and March 2025, with newly published figures revealing that £2.1bn was allocated for hotel accommodation during this period. This amount translated to an average daily expenditure of about £5.77m, representing a reduction from the previous year’s £3bn or £8.3m per day. The cost-saving measures were attributed to a decrease in the average nightly cost per housed individual, resulting from the government’s shift towards more cost-effective accommodation options and promoting room sharing.
Despite the cost savings, Dr. Peter Walsh from the Migration Observatory cautioned that the recent increase in small boat crossings could potentially necessitate a return to relying on hotels to accommodate asylum seekers. The government’s commitment to phase out the use of asylum hotels by the end of the current Parliament may face challenges based on current migration trends. At the end of March 2025, 32,345 individuals were housed in asylum hotels, higher than the previous June but fewer compared to December figures.
A senior Home Office source highlighted the move of asylum seekers from hotels to alternative, cheaper accommodation as a key factor contributing to the cost reduction. Efforts were made to prioritize relocating families and children to regular housing to minimize extended stays in hotel settings. The majority of individuals relocated from hotels are reported to have transitioned to local housing or houses in multiple occupation (HMOs), rented accommodations where shared bathroom and kitchen facilities are utilized by at least three occupants. Notable savings were achieved through contract renegotiations and increased room-sharing arrangements within hotels, as disclosed in Home Office accounts.
The Home Office’s financial records also revealed that approximately £50m in public funds was deemed unrecoverable following the cancellation of a Conservative-backed plan to utilize the RAF Scampton site in Lincolnshire for housing asylum seekers. Conversely, the decision to scrap a scheme involving a £270m payment to Rwanda, intended to support the country’s economic development as part of an asylum deterrence initiative, resulted in no refunds being issued following the termination of the agreement by the UK government. The failed scheme, characterized by legal hurdles and minimal voluntary returns, underscored the complexities associated with asylum policies and international collaborations in managing migration challenges
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