Hotel contracts and small boats: the UK's broken asylum system

Keir Starmer's promise to cut migration won't reduce the cost of processing and housing asylum seekers, argues John Simpson, home affairs editor

- John Simpson, home affairs editor

Keir Starmer last week promised a significant fall in net migration to the UK over the next four years.

That will be the easy part - net migration is already falling after rising to record numbers under the last administration.

The focus of much public anger - brought into sharp focus by racist riots last year - is the asylum system, the use of hotels to house people while their claims are processed and the arrivals of thousands of migrants to Britain's shores in small boats.

The UK spent an estimated £5.3bn last year on the asylum system, with £3.1bn on accommodation. Although far higher than Home Office predictions, it is 0.5% of an annual government spend of £1.226tn.

Small boat arrivals last year accounted for about 5% of total net migration to the UK. The post-Brexit spike in migration has been driven by arrivals of non-EU workers on work visas, along with their dependents.

The overspend

After taking over as chancellor last July, Rachel Reeves calculated an overspend by the previous government of £6.4bn on the asylum system. She put this at the heart of a £22bn "black hole" in public finances for 2024. Scrapping Conservative policies including the Rwanda scheme saved more than a billion.

The main driver of repeated cost miscalculations has been housing asylum seekers awaiting decisions about their claims, propelled by the last government's decision in 2019 to rush out contracts to three companies to house applicants in hotels across the country.

The hotels

This month the National Audit Office (NAO) revealed that the overall cost of using hotels is expected to rise to more than £15bn over 10 years - three times the projected cost when the scheme was set up in 2019.