UK’s asylum hotel bill down 30%, government says

The government spent nearly a third less on hotels to house asylum seekers between April 2024 and March 2025, according to newly published figures.

The Home Office’s annual accounts show £2.1bn was spent on hotel accommodation – an average of about £5.77m per day, down from £3bn or £8.3m per day, the previous year.

Data obtained by BBC Verify shows the saving has been driven by a reduction in the average nightly cost per person housed, after a government move to use cheaper forms of accommodation and room sharing.

But Dr Peter Walsh, from the Migration Observatory think tank at Oxford University, warned that the surge in small boat crossings seen since March could lead to a renewed reliance on hotels.

“I don’t think hotels are going away anytime soon based on current trends,” he said.

Hotel accommodation is used when there is no other housing available for asylum seekers, and the government has committed to stop using asylum hotels by the end of this Parliament.

There were 32,345 people in asylum hotels at the end of March 2025, up from 29,585 people at the end of June last year, but lower than the total in December.

A senior Home Office source said one of the main factors behind the saving was moving some asylum seekers from hotels into other types of cheaper accommodation.

They said the department had prioritised moving families and children into regular housing so they were not living in hotels for long periods of time.

BBC News understands the majority of people moved out of hotels are now living in local housing, or houses in multiple occupation (HMOs), a type of rented accommodation where at least three individuals share the use of a bathroom and kitchen.

Most of these properties have been acquired through the government’s contracts with Serco, one of the three companies responsible for asylum accommodation.

Some savings have also been made by renegotiating elements of those contracts, which were originally signed by the previous Conservative government.

Officials have previously told MPs that greater room-sharing in hotels has helped reduce the number of sites and per head costs over the past financial year.

It is not clear how many people usually share a room, but Home Office minister Angela Eagle has previously said “people can double up or treble up” if rooms are big enough.

The Home Office accounts suggest 273 hotels were in use in March 2024 but that number has now fallen by 71.

The average nightly cost per person fell from £162.16 in March 2023 to £118.87 by March 2025, according to BBC Verify’s analysis of official data obtained through a Freedom of Information request.

The Home Office’s accounts also show that almost £50m of public money was effectively written off after the Labour government scrapped a Conservative plan to use the RAF Scampton site in Lincolnshire to house asylum seekers.

Tens of millions had already been spent on the site when Labour came to power and axed the plans.

The Home office annual report says that decision resulted in a “constructive loss of £48.5m”, but a department source said the site would have been an even more expensive option than hotels, even taking into account the loss incurred.

The report also confirmed that £270m paid to Rwanda to help support the country’s economic development was not refunded after the UK government scrapped the Rwanda scheme.

Conservative ministers had planned to send some asylum seekers to Rwanda to deter people from crossing the Channel in small boats.

However, the scheme was stalled by legal challenges and Home Secretary Yvette Cooper has said it led to just four people being removed to the country voluntarily.

The Rwandan government said last year that it was “under no obligation” to pay back the £270m after Labour scrapped the deal.