Spending Review 2025: Asylum Hotel

– Contributing writer Georgia Edwards lays out systemic issues in changes to the asylum system following the Spending Review 2025.

The UK government announced their spending review last month, which promised to reduce the annual cost of the asylum system by a billion pounds by 2029. To achieve this they emphasised a focus on phasing out hotels to house asylum seekers, by pledging to clear the asylum backlog and increase appeal capacity. Since 76% of the annual cost of housing contracts is incurred from hotels in which only 35% of asylum seekers are accommodated, this appears a logical and fiscally defensible move. But it begs the question – where will they house everyone? 

Asylum accommodation

Asylum seekers in the UK are provided with accommodation and financial support under the Immigration and Asylum Act 1999 (IAA 1999). This is on the basis that they would otherwise be destitute, have no other means of supporting themselves and do not have any friends or family in the UK that can provide them with their essential living needs. 

Typically, when an asylum seeker first arrives in the UK, the Home Office provides initial accommodation, designed to be temporary – this is provided under Section 98 of IAA 1999. The accommodation is usually a hotel or hostel, where meals are provided along with a small amount of money, usually £9.95 per week, on a preloaded card. 

Once the Home Office have fully assessed that an asylum seeker would otherwise be destitute, they are granted Section 95 and provided with dispersal accommodation. This is usually a room in a shared property, which can be anywhere in the UK, and £49.18 per week on a pre-loaded card.  However, there is a lack of dispersal accommodation in part due to the backlog of asylum cases with the Home Office and at appeal. Therefore, many people are held in hotels for months, if not years, despite being entitled to Section 95 asylum support. The Home Office is attempting to increase dispersal accommodation capacity but finding suitable sites outside of very remote and rural locations where access to services is challenging remains difficult.

The alternatives

Charities and human rights organisations have long reported the damage on the mental and physical wellbeing being housed long-term in hotels or hostels has on asylum seekers. Some of these are miles from local services such as GP surgeries, shops, schools, colleges, and hospitals. Therefore, while we welcome the proposal to decrease the reliance on hotel accommodation, the reported alternatives are not promising. They are less suitable, potentially unsafe, and do not prioritise the physical and mental health of the asylum seekers. 

This is not the first time the government has arranged unsuitable accommodation as a proposed ‘cost-cutting’ measure, resulting in disastrous consequences. Prior to the 2024 general election, the Conservatives commissioned the Bibby Stockholm, a floating barge anchored off the coast of Dorset, which was decommissioned after only one year. This followed a Legionella bacteria outbreak that, while not the sole cause for its defunding, led to a mass evacuation for health and safety reasons and the suicide of Leonard Farruku who was housed on the barge while waiting for a decision on his asylum claim. His family are calling for an independent inquiry into his death which to date has not been confirmed by the Home Office. A report from the Guardian highlighted how he did not receive support for his mental health issues, and many of the men accommodated on the barge stated the conditions were ‘prison-like’ but were given no other choice, per the Home Office Allocation of Asylum Accommodation policy. 

The use of ex-military sites, which are tabled as a potential alternative to hotels, echoes many of the same concerns. This is despite a High Court ruling in April 2021 that found the use of Napier Barracks, in Kent, was an unlawful and irrational way to house asylum seekers for several reasons. The dormitory style accommodation was unhygienic, not adequate for the number of residents, lacked privacy and had constant noise and commotion which contributed to significant deterioration in the wellbeing of the residents. Furthermore, the Home Office ignored warnings from Public Health England that the communal style accommodation was not suitable during the outbreak of the Covid pandemic, which ultimately led to a mass infection of residents between. From January to March 2021, they unlawfully restricted the movement of residents, did not address fire safety risks, and had no adequate system in place to identify inhabitants that were vulnerable.  Napier Barracks continued to house male asylum seekers after alleged improvements following the High Court ruling. However,  in March it was confirmed by the Home Office that the contract for the site ends in September 2025 and will be handed back to the Ministry of Defence (MoD). 

Yet other MoD sites, such as MDP Wethersfield in Essex, have contracts that run until April 2027, and have recently signed off a Special Development Order (SDO) which expands the capacity of the site from 580 to 800 residents. Like Napier Barracks, Wethersfield has been shown to create harmful conditions. In March 2025, Justice Timothy Mould found the government had acted unlawfully in accommodating three asylum seekers at the Essex site between July 2023 and February 2024. The three appellants had all been victims of trafficking and torture, and as a result have mental health conditions and disabilities. The decision states that not taking these aspects into consideration when accommodating them at the ex-RAF site breached the government’s obligations under the Asylum and Immigration Act 1999 (IAA 1999). 

Both court decisions make cogent the lack of care and safeguarding the Home Office has provided to a vulnerable group. This is without considering how the sites are often surrounded by tall, barbed fences akin to detention centres, the lack of access for legal representatives to assist with asylum claims, and how volunteers delivering donations to Napier Barracks were required to sign non-disclosure agreements that were underpinned by the Official Secrets Act – which is usually reserved for threats to national security. It is unclear how such sites can or will be radically changed to become suitable and, unfortunately, a wider systematic challenge brought by a fourth appellant in the Wethersfield case was dismissed. This is despite the argument the site is generally unsuitable for use as asylum accommodation and the Allocation Policy used by Home Office caseworkers to assess suitability of accommodation for each individual is not legally aligned with the IAA 1999. With the increase of capacity at Wethersfield, the general wellbeing of asylum seekers does not appear to be a significant factor in Home Office decision-making and policy. 

Multiple Occupancy Housing

While it is understandable that the cost of accommodating asylum seekers may currently be unsustainable, there has been little scrutiny by the government of the companies who were awarded the dispersal accommodation contracts. In 2019, the Home Office initiated the Asylum Accommodation and Support Contracts (AASCs) which were awarded to Clearsprings Ready Homes (Clearsprings), Mears Group, and Serco. In South England and Wales, which includes Plymouth, Clearsprings provide the dispersal accommodation. The National Audit Office estimates that the current total spend over 10 years on these contracts is £15.3 billion. Graham King, the founder of Clearsprings Ready Homes, has recently been named among one of the 350 richest people in the UK in part due to his contract with the Home Office and all the AASC contracts average a 7% profit, which raises questions as to whether the substandard accommodation and support reported by DCRS service users and witnessed by caseworkers is in part due to misspent funding.

Key concerns include the disproportionate number of properties to housing managers, and the provisions at the properties not always being sufficient for health, safety, and minimal comfort. Defect reporting systems are further obscured by the involvement of Migrant Help, who holds the Advice, Issue Reporting and Eligibility (AIRE) contract. This is where housing issues are reported, which are then fed back to the housing provider. DCRS caseworkers report instances where a housing manager, despite being directly informed of a housing defect, has stated they can only deal with a complaint if they are informed through Migrant Help. This usually entails hours waiting on the phone to talk to a call handler, or using an online web chat which is not accessible to some asylum seekers and regularly disconnects. 

The complex nature of the system also affects the reporting of safeguarding concerns. Numerous safeguarding issues have received either a lagged response, or none at all, even with advocacy from DCRS caseworkers. The lack of safeguarding concerns is mirrored in the operational provisions of the AASC contracts. The Home Office does not measure safeguarding outcomes of the AASC contractors or specify any deductions in relation to safeguarding performance, despite the Home Office acknowledging they have a duty of care to those they are accommodating. Furthermore, the same report states the Home Office does not collate the safeguarding data despite receiving 4,000 safeguarding referrals a week. This is particularly worrisome considering asylum seekers can often have complex physical and mental health needs due to pre-flight and en-route trauma. 

Local Authority Pilot Scheme

The Institute for Public Policy Research (IPPR) published a report in October 2024 echoing much of the concern for the cost of hotel asylum accommodation along with its lack of suitability. The think-tank’s key proposal suggested decentralising provision of asylum accommodation and support services to regional bodies that have the relevant knowledge and experience to acquire cost effective housing that also provides a dignified experience for the tenant. Interestingly, in recent weeks, the Home Office has started to do just that through the The Home Office Asylum Dispersal Pilot. The plan entails the council buying or building new homes financed by central Government, then leasing them to the Home Office for 10 years before they return to the council’s own estate. Some local authorities have already expressed their interest, such as Powys County Council, but it is unclear if this is being considered by any in the South West. Considering the government’s announcement in the Spending Review to introduce £39 billion investment in the Affordable Homes Programme (AHP) and £2.5 billion low-interest loans for social housing providers to support housebuilding, this model can effectively tackle two key issues; the shortage of housing stock in the UK and the suitability of asylum accommodation.

The short-term solutions have been costly – both financially and in the care of asylum seekers. The governments’ move away from hotels is an opportunity to invest in appropriate, non-temporary measures to accommodate asylum seekers where they can have their essential needs met and funds are not pocketed by profit-driven contractors. Labour should act on their campaign pledge by ending the use of Wethersfield and other sites, and ensure that all asylum seekers can live with dignity.