The UK government’s expenditure on housing asylum seekers has surged dramatically, with new figures revealing that costs are set to triple the initial projections made in 2019.

According to a report by the National Audit Office (NAO), the Home Office had originally estimated that £4.5 billion would be spent over a decade on asylum accommodation contracts. However, this figure has now escalated to an expected £15.3 billion. The increase is primarily attributed to a significant rise in the number of asylum seekers and a heavy reliance on hotel accommodations.

As of December 2024, approximately 110,000 asylum seekers were residing in government-funded accommodation, up from around 47,000 in December 2019. Notably, hotels, which house about 35% of asylum seekers, account for 76% of the accommodation costs. The average nightly cost per person in a hotel is £145, compared to £14.41 for shared housing.

The NAO’s report also highlights that private contractors managing these accommodations—Serco, Mears, and Clearsprings—have collectively earned £383 million in profits from these contracts between September 2019 and August 2024. Clearsprings’ contract in the south of England has seen its value rise from £0.7 billion to an anticipated £7 billion.

In response to the escalating costs, the Home Office has initiated measures to reduce hotel usage and explore alternative accommodation options, such as large sites and dispersal housing. However, the NAO warns that these alternatives may ultimately prove more expensive than the current hotel arrangements.

The Refugee Council has called for a comprehensive overhaul of the asylum accommodation system, advocating for closer collaboration with local authorities to provide more sustainable and humane housing solutions.

The government’s handling of asylum accommodation remains a contentious issue, with ongoing debates about cost, efficiency, and the treatment of asylum seekers.