Home Office overspent on asylum by billions. Here’s how that money could’ve been used

The Home Office spent a staggering £7.6bn more than was forecast on asylum support over the past three years, a think tank has found.

Between 2021–22 and 2023–24, the Home Office under successive Conservative governments planned to spend an average of £110m a year on asylum, border, visa and passport operations, for a total of £320m. But spending over the three-year period instead amounted to an eye-watering £7.9bn.

The Institute for Fiscal Studies (IFS) – who tallied the overspend – attributed it to “woeful” budgeting at the Treasury and Home Office.

“When there is a one-off unexpected spike in costs or demand, spending more than was budgeted is entirely understandable,” said Max Warner, research economist at IFS. “But when it is happening year after year, something is going wrong with the budgeting process.”

Some of this money was wasted ­– for example, the £700m sunk in the failed Rwanda scheme. Other allocations, like housing support for asylum seekers, were necessary.

But though much of the money needed to be spent, “unrealistically low” budget estimates by the Tories have contributed to £20bn ‘black hole’ in public finances as outlined by chancellor Rachel Reeves. Prime minister Keir Starmer has warned that this ‘black hole’ will mean a “painful” October budget.

So just how much is £7.6bn? Here are some of the things you could do with this lump sum.

Freeze water bill increases – and hand extra cash back to billpayers

Water industry regulator Ofwat plans to let water companies increase bills by £94 per household over the next five years.

The hike comes as the industry charges customers to fix their crumbling infrastructure. If Ofwat sticks to its draft determination, the average household bill will increase by £19 each year to 2030. Cumulatively, this will cost around £2.7bn.

With £7.6bn, you could cover this increase – and reduce each British household’s bills by a further £172 each.

Fill every vacancy in the social care sector

The social care sector has 130,000 vacancies. The 8.3% vacancy rate is around three times the average for other sectors. But low pay and difficult conditions make it extremely hard to recruit a domestic workforce.

The starting salary of a care worker is usually minimum wage, around £19,000. With £7.6bn, you could hike the starting salary to £30k and still have enough money to hire 253,000 workers.

Restore the universal winter fuel payment five times over

The Labour government recently decided to cut winter fuel payments for around 10 million pensioners in England and Wales, citing budget pressures inherited from the last government.

The payment – worth around £300 per year – will instead be means-tested, available only to pensioners receiving benefits such as pension credit. The policy is expected to save the Treasury £1.4bn this financial year, but campaigners have warned that ‘vulnerable’ elderly people could lose invaluable support.

With £7.6bn, you’d have enough money to restore the universal payment more than five times over.

Extend the household support fund for nine years

The Department for Work and Pensions (DWP) announced on Monday (2 September) the extension of the household support fund in England until April 2025.

The £421m extension to the government’s hardship fund will help “the most vulnerable” cover bills and essential costs, the government has said.

With £7.6bn, you could extend the fund a further 18 times (though inflation would eat into its value), a period covering nine years.

Recruit 304,000 refugee doctors into the NHS

Training a new doctor from scratch is estimated to cost between £200,000 and £250,000. But many asylum seekers have pre-existing medical qualifications. The Refugee Council estimate that it costs around £25,000 to support a refugee doctor to practise in the UK. With £7.6 billion, you could support 304,000 medically qualified refugees to become British doctors.

Host the Olympics

France’s sporting spectacle is estimated to have cost £6.75bn. Britain last hosted the Olympics in 2012. With the same amount of money in the budgeting overspend, we could do it again – and have some money left over for an extra-special opening ceremony. Spice Girls reunion 2.0, anyone?

Buy 1.9 billion meal deals

Tesco prompted outrage this month by hiking the price of its meal deal. Clubcard members now pay 20p more for their meal deal, meaning a main, snack and drink costs £3.60. Customers without a Clubcard will pay £4, a 10p increase.

With £7.6bn, you could buy 1.9 billion non-Clubcard meals. That’s a lot of sandwiches.

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