Cost of housing asylum seekers soars to £41,000 per person, study finds: ‘Urgent reform needed’

The average annual cost of asylum accommodation has more than doubled since 2019, despite “substandard” and “unsafe” living conditions, a damning new report has found.

Research released on Thursday (24 October) by the Institute for Public Policy Research (IPPR) found that the average cost of housing and supporting an asylum seeker has risen from £17,000 per person in 2019/20 to approximately £41,000 per person in 2023/24, which the IPPR claimed was “primarily down to reliance on hotels”. 

The think tank added that the overall cost of the asylum system has risen from £739m to an expected £4.7bn in the same time frame. 

While costs have “soared”, however, several refugees and asylum seekers have reported “unsafe” conditions to IPPR, including being housed in cramped accommodation with too few beds. 

Muhammad, an asylum seeker, told the think tank: “Asylum accommodation should offer a pathway to safety and dignity, but instead, it traps people in unhealthy, unsafe conditions. 

“We are not just statistics – we deserve homes that support our wellbeing, not spaces where we are left to deteriorate.”

Another unnamed asylum seeker said: “We will stay in the room [with] four in the room, just one room, no cleaning, no bedsheet.” 

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The report claimed that the increases in cost could have been driven in part by the “slow processing of asylum claims” and the “growing backlog” under the Conservative former government. In February this year, it was found that up to 50,000 asylum seekers in the UK were trapped in a “perma-backlog” due to delays in processing claims. 

The IPPR’s report found that due to this backlog, many asylum seekers are forced to stay in temporary accommodation like hotels, which it says “at around £145 per night per person is staggeringly more expensive than the average of £14 per night costs of dispersal accommodation (such as in traditional housing stock like flats or shared housing)”.

Jeremy Bloom, a solicitor for Duncan Lewis, one of the largest providers of asylum legal aid in the UK, explained that part of the reason asylum seekers are housed in temporary accommodation like hotels for “far too long” is due to “systemic delays in the asylum system”.

“These delays are exacerbated by people’s inability to access legal aid representation for their claims,” he told the Big Issue.

“The asylum support accommodation system is broken. Our clients are regularly detained under immigration powers because suitable accommodation, to which they have a legal entitlement, cannot be sourced for them. Once accommodation is sourced, it is often temporary and includes the provision of food that does not meet basic requirements of hygiene and health. There is also nowhere near enough accessible accommodation available for people with disabilities.”

He continued: “It is a lose-lose situation; asylum seekers are expected to live in unsuitable conditions, and the taxpayer foots a bill which lines the pockets of private companies that routinely fail to meet the requirements of their contract with the Home Office.”

Dr Lucy Mort, senior research fellow at IPPR, claimed the asylum accommodation system in the UK is “in urgent need of reform”, and costs are too high while “failing to provide people fleeing war and persecution with the safe, clean environments they need”. 

“Poorly designed contracts, mismanagement, and lack of local input have left those seeking asylum trapped in substandard living conditions for too long; and caused real challenges for regional, local and devolved governments,” Dr Mort explained. 

“We must decentralise control to regional and local bodies that can better understand and serve their communities, enhance safeguarding to protect vulnerable people, and create the conditions for those seeking asylum to rebuild their lives.”

The IPPR provided several recommendations to the government on asylum accommodation, including “decentralising” the provision of accommodation and support away from the Home Office and towards regional bodies “who can take local approaches”. 

It explained that asylum accommodation in the UK has been “outsourced” by the Home Office to three private providers since 2019, with the contracts coming to an end in 2029. IPPR claimed that the contracts’ break clause in 2026 offers a “critical opportunity for the government to implement decisive reform”. 

It added that ahead of the contracts coming to an end, the situation could be improved by “immediately closing any remaining failing large sites” and strengthening “accountability and oversight of private companies to improve standards” in the short time. 

Alongside this report, it was found in September 2023 that the previous government’s plan to reduce the costs of housing asylum seekers in hotels was “pushing refugees into homelessness”. Figures from August estimated that 4,840 refugee households were homeless between January and March of this year. This represents an increase of 348.1% from the same time period last year.

Councillor Bella Sankey, leader of Brighton and Hove City Council, said that she “welcomed” the IPPR report, “which makes a compelling case for urgently ending the outsourcing contracts with private companies for asylum accommodation.”

“Aside from the substandard conditions that are having to live in, as this report shows the cost to the public purse is also eye watering,” said Sankey. 

“I welcome the report’s recommendation to decentralise control to regional and local bodies who are best placed to provide integrated support for asylum seekers in refugees.”

She added: “While these private sector contracts run to 2029, there is a real opportunity to use the contract break clauses in 2026 to reform the delivery of asylum accommodation.”

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