It’s a crisis that has inflamed passions across the United Kingdom: the spiraling costs, management blunders, and mounting public anger over the use of hotels to house asylum seekers. In a series of damning new reports, MPs and watchdogs have painted a bleak picture of a Home Office system that, by their reckoning, has failed both taxpayers and migrants alike—costing the public billions, enriching private firms, and leaving communities divided.
According to a comprehensive report by the Commons home affairs committee, the government’s approach to asylum accommodation has been nothing short of “failed, chaotic and expensive.” The numbers are eye-watering: since 2019, three main providers have raked in a combined profit of £383 million on Home Office contracts, while the overall bill for 10-year accommodation agreements has soared from £4.5 billion to more than £15 billion. As The Telegraph reported, even the Chinese Communist Party has benefited, owning three hotels block-booked for migrants and receiving £15 million from UK taxpayers for their use.
At its peak, the system was housing 56,000 people in 400 hotels. Today, more than 32,000 asylum seekers remain in about 200 hotels, costing the public purse over £2 billion a year—an average of £145 per migrant, per night. The Home Office’s own figures, cited by Express, confirm that the current annual spend sits at £2.1 billion, and that the number of hotels used for asylum accommodation has only recently started to fall from its pandemic-era peak.
So how did it come to this? MPs say the roots of the crisis lie in a combination of neglect, poor contract management, and a rushed response to the sharp increase in asylum arrivals, especially during the COVID-19 pandemic. When the government was forced to rapidly expand hotel use, it missed a critical opportunity to renegotiate contracts. As a result, contractors were able to increase their profits six-fold, with profit-sharing clauses failing to account for the sheer scale of expansion. The committee noted, “Profit share clauses failed to account for the large expansion of hotel accommodation, generating vast profits for providers.”
Worse still, the Home Office failed to penalize providers for poor performance—even at large sites like the former RAF base in Wethersfield. According to the committee, “the government did not penalise migrant hotel providers for poor performance, and large asylum sites such as the former RAF base in Wethersfield faced no penalties for underperforming either.” This lack of oversight meant that firms kept tens of millions of pounds in excess profits, which the Home Office only began to proactively retrieve in 2024.
As ITV News highlighted, MPs have been scathing in their verdict: “billions of pounds have been wasted because of a ‘rushed and chaotic’ approach to asylum hotels.” The report accuses the Home Office of “squandering” taxpayers’ money, and calls for a fundamental overhaul of the system. The committee’s message is clear: without a long-term plan and institutional capability to deliver a more effective and value-for-money model, “past failures risk being repeated.”
But the financial mismanagement is only part of the story. The crisis has also sparked deep social tensions and public protests, particularly after high-profile incidents involving asylum seekers. The mistaken release and subsequent recapture of Hadush Kebatu, a migrant sex offender, became a flashpoint. As The Telegraph recounted, Kebatu’s arrest for sexual assault in Epping led to vigils and demonstrations outside the hotel where he had been resident. Local anger over the continued housing of young male asylum seekers in hotels boiled over, with many residents demanding change and questioning the government’s ability to keep communities safe.
Such incidents have fueled broader concerns about the transparency and accountability of those profiting from the crisis. The revelation that even foreign state-owned companies—like those linked to the Chinese Communist Party—were benefitting from taxpayer-funded contracts only added to the outrage. As the committee put it, “these contracts have been handled recklessly by the Home Office.”
Prime Minister Sir Keir Starmer has responded to mounting pressure by pledging that the use of asylum seeker hotels will end by 2029. Speaking on October 27, 2025, Starmer promised to “draw a line under the current failed, chaotic and expensive system and move to a model that is more effective and offers value for money.” But the road ahead is fraught with uncertainty. The committee has warned that simply appealing to popular opinion—without a clear, practical plan for housing asylum seekers—risks “under-delivery and consequently undermining public trust still further.”
Alternatives to hotel accommodation have been floated, including the use of military bases, disused properties, or scarce social housing. Yet, progress has been slow. As The Telegraph observed, “detention centres at military bases are talked about but little happens. Places in scarce social housing seem likelier.” For now, the government says it is “furious about the number of illegal migrants in this country and in hotels,” and insists it is “closing hotels, slashing asylum costs by nearly a billion pounds and exploring the use of military bases and disused properties.”
Yet, for many critics, these assurances ring hollow. The committee’s report points out that the scheduled end of existing contracts and some break clauses next year offer a rare opportunity for the Home Office to “draw a line under the current failed, chaotic and expensive system.” But, as the MPs warn, “without a clear long-term plan and the institutional capability to deliver a model that is more effective and offers value for money, past failures risk being repeated.”
Public frustration is palpable—not just over the financial waste, but also over the sense that ordinary people are being asked to foot the bill for government mistakes. As The Telegraph put it, “the expense of this fiasco is bad enough but for these contracts not to have been properly managed is a grotesque insult to taxpayers who have to pay for everything only to be castigated for racism when they complain.”
With billions already spent, a deeply divided public, and no quick fix in sight, the UK’s asylum accommodation crisis stands as a cautionary tale of what happens when urgency trumps oversight and long-term planning. The next few years will reveal whether the government can finally deliver the change it has promised—or if taxpayers and communities will be left footing the bill for yet another round of costly mistakes.
