The government is spending around £2.2billion a year of foreign aid on housing asylum seekers in hotels in the UK.
According to information from the Home Office, the BBC states that Labour was only able to reduce its expenditure on official development assistance by approximately £1million between 2024 and 2025.
That is despite the party’s election manifesto pledge to ‘end asylum hotels, saving the taxpayer billions of pounds’.
Official development assistance (ODA) is referred to as the UK’s foreign aid budget, dedicated to enhancing economic growth and well-being in developing nations globally.
Part of this budget is allocated to the Home Office to assist refugees and asylum seekers immediately upon their arrival in the UK, with a significant portion going towards providing accommodation for them.
At the end of December 42,000 asylum seekers were in Home Office ‘contingency accommodation’, including 38,000 in hotels, a report National Audit Office (NAO) showed last month.
This includes 735 people being housed in large accommodation sites built by the previous Conservative government, including former RAF base Wethersfield, in Essex, and Napier former barracks in Kent.
Previous figures show the government spent around £2.3billion of Home Office ODA on asylum accommodation in 2024/25 while around £2.5billion was spent in 2023/24, when the Conservatives were in power.
The government is spending around £2.2billion a year of foreign aid on housing asylum seekers in hotels in the UK. Pictured: A group of migrants pictured outside a migrant hotel in Cheshire
Last month, it was revealed that asylum accommodation – including hotels – will cost the taxpayer £15billion over 10 years.
Data from the National Audit Office (NAO) showed that contracts originally forecast to cost £4.5billion over a decade from 2019 are now expected to run to £15.3billion over same period.
It means that on average the taxpayer will spend £4,191,780 a day on housing asylum seekers over the life of the contracts.
A separate breakdown from the NAO showed overall costs in 2024-25 were £1.67billion.
That amounted to £4,567,123 a day on average, or £3,172 a minute.
The report also found that asylum hotels ‘may be more profitable’ for companies holding the contracts than other types of housing.
The Home Office awarded the contracts to three suppliers – Clearsprings Ready Homes, Mears Group and Serco – which operate two or three UK regions each.
They are responsible for finding a range of self-catering accommodation for asylum seekers who are dispersed across the country, and for sub-contracting hotels for tens of thousands of migrants coming across the Channel by small boat.
Migrants pictured outside former Best Western Cresta Court Hotel, Altrincham, Cheshire, which has now been re-purposed as migrant accommodation
Migrants at a hotel in Cheshire earlier this year, with properties paid for by the Home Office through contracts with private suppliers which have now been scrutinised by the National Audit Office
The report found Clearsprings is now set to be paid £7.3billion over the 10 years from 2019 to 2029, the NAO said, while Serco is expected to get £5.5billion and Mears will receive £2.5billion.
Earlier this year it was reported that Deputy pm Angela Rayner wants the Government to terminate contracts they have made with private companies to house migrants.
In its election manifesto, Labour vowed to ‘hire additional caseworkers to clear the Conservatives’ backlog and end asylum hotels, saving the taxpayer billions of pounds’.
But, despite the pledge, the Home Office is yet to set a definite end date on migrant hotels as it does not want to commit to ‘arbitrary targets’.
The only vague timeframe given by the department was by Matthew Rycroft, the department’s top civil servant, in February.
He told MP’s that the aim is to get to ‘zero by the end of the parliament’, leaving open the possibility migrant hotels could stay until August 2029.
A Home Office spokesperson said: ‘We inherited an asylum system under exceptional pressure, and continue to take action, restoring order, and reduce costs.
‘This will ultimately reduce the amount of Official Development Assistance spent to support asylum seekers and refugees in the UK.
‘We are immediately speeding up decisions and increasing returns so that we can end the use of hotels and save the taxpayer £4bn by 2026.
‘The Rwanda Scheme also wasted £700m to remove just four volunteers – instead, we have surged removals to nearly 30,000 since the election, are giving law enforcement new counter-terror style powers, and increasing intelligence sharing through our Border Security Command to tackle the heart of the issue, vile people-smuggling gangs.’
