(Bloomberg) -- The UK government should transfer responsibility for housing asylum-seekers to regional bodies, a research institution has proposed, as the soaring costs of accommodation divert funding from other programs.
The move would help reverse a shift toward putting up migrants in hotels, research by the Institute for Public Policy Research found. That practice has been blamed for more than doubling the annual cost of housing each asylum-seeker to £41,000 ($53,000) over the past five years, as application backlogs surged under the previous Conservative government.
Labour’s recently installed home secretary, Yvette Cooper, has vowed to stop using hotels to house people waiting for their asylum applications to be processed. Not only have the hotels become a focal point of anti-immigrant sentiment, with far-right protesters attacking some during a wave of riots over the summer, they’re drawing money from things like foreign aid.
More than a quarter of the £15.4 billion foreign aid budget is being consumed by asylum costs in the UK, prompting Foreign Secretary David Lammy to push for a top-up. The issue is likely to be point of contention when Prime Minister Keir Starmer meets Commonwealth heads of government this week in Samoa.
While current contracts with accommodation providers run until August 2029, the IPPR said the Home Office should use a break clause in 2026 to end the arrangement. Responsibility to find new housing could then be delegated to existing strategic migration partnerships — bodies led by local authorities — to find suitable lower-cost spaces, the IPPR said.
“Poorly designed contracts, mismanagement, and lack of local input have left those seeking asylum trapped in substandard living conditions for too long, and caused real challenges for regional, local and devolved government,” said Lucy Mort, senior research fellow at the IPPR. “We must decentralize control to regional and local bodies that can better understand and serve their communities.”
A Home Office spokesperson said many of the criticisms in the IPPR report “apply to the policies of the previous government,” and that Labour was now working “at pace” to resolve them.
“While it will take time to restore order to the asylum system, we have put in place a serious and credible plan to bring down the backlog by restarting asylum processing and ramping up returns,” the spokesperson said in an emailed statement.
‘Integrated Support’
From the late 1990s, asylum-seekers were housed in low-cost, hard-to-rent empty housing stock owned by local authorities and private landlords. In 2019, the Home Office awarded accommodation contracts to three private firms — Clearsprings, Mears and Serco — who subsequently subcontracted with hotel chains.
The overall cost of the asylum system has risen to £4.7 billion from £739 million in the five-year period.
The previous government’s decision to slow application processing as former Prime Minister Rishi Sunak attempted to deport asylum-seekers to Rwanda also drove up demand for hotels. Now that Labour has scrapped the deportation plan, it needs to address the housing issue.
Moreover, asylum-seekers have reported unsanitary conditions and harassment from staff at some hotels, adding to mental health concerns for those in the system. “We will stay in the room [with] four in the room, just one room, no cleaning, no bed sheet,” one asylum-seeker told researchers.
Decentralization would allow for a more tailored approach, IPPR said, and would allow local authorities to take advantage of existing knowledge and relationships in their area. Bella Sankey, the Labour leader of Brighton & Hove City Council, said she welcomed the recommendation to hand control to regional bodies “who are best placed to provide integrated support for asylum seekers in refugees.”
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