Rishi Sunak’s plan to save public money by moving asylum seekers out of hotels is in tatters after Whitehall’s spending watchdog disclosed that the government’s alternative sites will cost millions of pounds more.
The National Audit Office said attempts to place people seeking refuge in a barge, two former RAF bases and former student accommodation will cost £1.2bn – £46m more than keeping them in hotels.
By the end of March, the Home Office expects to have spent at least £230m developing four major projects: the Bibby Stockholm barge in Portland, Dorset; the former RAF bases at Scampton in Lincolnshire and Wethersfield in Essex; and former student accommodation in Huddersfield, West Yorkshire.
So far just two of the sites are open, with about 900 people housed by the end of January, according to the watchdog’s findings.
A report released on Wednesday also discloses that approval was rushed through without developing safety plans for asylum seekers or consulting councils and local communities.
The Home Office was “still working with providers” in January to develop safety measures on the Bibby Stockholm, weeks after Leonard Farruku, 27, an asylum seeker from Albania, was found dead in a suspected suicide.
The findings follow the prime minister’s claim in August that he would stop asylum seekers using hotels and find alternative, cheaper sites.
“British taxpayers are forking out £6m a day to house illegal migrants in hotels and other accommodation,” Sunak told GB News. “That’s clearly wrong, it’s unfair and that’s why I want to put an end to it. Now, in the short term, we’re finding alternative sites like the barges that we’re bringing in, which are new ways to deal with this problem which no one else has done but I’ve done.”
The findings come in a report which also discloses that:
The Home Office is considering scaling back the number of people at Wethersfield – which is in the constituency of the home secretary, James Cleverly – after reports of self-harm and violence among asylum seekers.
Officials secured large sites to house people before talking to local councils and MPs and used emergency planning regulations to ensure plans were rushed through.
The department pursued the programme despite “repeated” assessments that it “could not be delivered as planned”.
Reviews by the Infrastructure and Projects Authority rated the Home Office’s work on large-scale accommodation as “red”, meaning “successful delivery of the programme to time, cost and quality appears to be unachievable”.
The Home Office also rated its performance as “red” as it recognised the challenges of the work, repeatedly revising accommodation targets “downwards”.
The department “prioritised awarding contracts quickly, and modifying existing contracts over fully-competitive tenders”, with “overly-ambitious accommodation timetables” leading to “increased procurement risks”.
The Home Office initially assessed that using large sites to house asylum seekers would be around £94m cheaper than hotels. But an updated assessment in January said that housing people in Scampton will cost £45.1m more than hotels, assuming the site is used until March 2028, while housing them in Huddersfield will cost £2m more.
Wethersfield will cost £0.5m less, the report said, while placing people in the Bibby Stockholm will cost £0.8m less.
According to the findings, the Home Office originally estimated setup costs at the former RAF bases would be £5m each but they increased to £49m for Wethersfield and £27m for Scampton. It assumed they would have 3,700 beds between them and use about 3,145 of these.
So far only Wethersfield, which has a capacity of 1,700, and the Bibby Stockholm, with space for about 500 men, are housing asylum seekers. At the end of January, there were 576 people at Wethersfield and 321 on the Bibby Stockholm, the report said.
Meg Hillier, the chair of the Commons public accounts committee, said: “The Home Office did not understand the challenges it faced in setting up large sites and moved too quickly, incurring losses, increasing risks and upsetting local communities. And the sites are housing fewer people than planned.
“The Home Office must do better when it resets its programme.”
Enver Solomon, the chief executive of the Refugee Council, said: “This is another alarming example of bad policies being implemented badly at huge financial and human costs.
“Given the sums involved, it seems incomprehensible that the Home Office didn’t bother to produce business cases for three of the large accommodation sites before pushing ahead.”
Yvette Cooper, the shadow home secretary, called the report “staggering”. She said: “The British taxpayer is already paying out eye-watering sums on asylum hotels and now it turns out the sites they promised would save money are costing the taxpayer even more. Rishi Sunak has taken the Tories’ chaos and failure in the asylum system to a new level.”
A source close to Cleverly said that at a time of unprecedented global migration the government has created large sites that can be used to reduce the overall costs in the long run. “We have been clear these costs are too high and have answered the question Labour cannot, of where you can house asylum seekers when it is not possible to return them to their home country,” the source said.
A Home Office spokesperson said: “We acted swiftly to reduce the impact on local communities by moving asylum seekers on to barges and former military sites.
“While we must provide adequate accommodation for asylum seekers who would otherwise be destitute, thanks to the actions we have taken to maximise use of existing space and our work to cut small boat crossings by a third last year, the cost of hotels will fall – and we are now closing dozens of asylum hotels every month to return them to communities.”
