On October 27, 2025, a damning report from the Commons Home Affairs Committee landed with a thud in Westminster, shining an unforgiving spotlight on the United Kingdom’s spiraling asylum accommodation crisis. The committee’s 100-page review, backed by cross-party MPs and detailed across outlets like Finance Monthly and Altrincham Today, accused the Home Office of “manifest failure”—squandering billions of taxpayer pounds on hotels that were never meant to be more than a quick fix.
The numbers alone are staggering. Since 2019, the projected cost of housing asylum seekers in the UK has ballooned from £4.5 billion to a jaw-dropping £15.3 billion, with £5.5 million spent every single day to keep over 32,000 people in 210 hotels, according to the committee’s findings. The government is currently supporting just under 103,000 asylum seekers, more than a third of whom remain in such temporary hotel accommodation. The roots of this crisis, the report insists, lie in flawed contracts, lack of oversight, and a response that was “chaotic” from the start.
Take the Cresta Court Hotel in Altrincham, once a local hospitality mainstay. A year ago, it closed its doors overnight—cancelling bookings and events with no warning—after striking a deal with Serco, a Home Office contractor. The hotel, now believed to be housing up to 300 asylum seekers, has become a flashpoint for protests, especially on Friday evenings, as local frustrations boil over. The Home Affairs Committee cited the Cresta Court as a prime example of how the government’s failure to engage with local authorities and communities has “created a vacuum” exploited by far-right activists, fueling tension and division.
“The Home Office has not done enough to engage with local authorities or local communities, undermining trust and the ability of local partners to respond to the placement of asylum seekers in their area,” the report stated bluntly, as quoted by Altrincham Today. The committee’s chair, Dame Karen Bradley, echoed this in The Telegraph: “The Government needs to get a grip on the asylum accommodation system that's cost taxpayers billions.”
It’s not just about money or mismanagement. The committee highlighted “significant safeguarding failings,” particularly for vulnerable people and children, and warned that the concentration of asylum seekers in hotels is placing “unsustainable pressures” on local services, including primary and social care. The report criticized the Home Office for not factoring in the use of contingency accommodation—like hotels—into its plans for fairly distributing asylum seekers across the country. This, it argued, is “unfair on local authorities and unacceptable.”
As costs soared and frustrations mounted, political blame games erupted. Prime Minister Sir Keir Starmer, fresh from Labour’s scrapping of the controversial Rwanda deportation plan (which cost £700 million without a single flight), pointed the finger squarely at the previous Conservative government. “We inherited mess,” Starmer said, following the report’s publication, as covered by Sky News. Housing Secretary Steve Reed, speaking to BBC Radio 4 and Sky News, doubled down: “We have inherited them, but we’ve put in place already additional case workers to deal with the number of asylum seekers. We can get them through more quickly – the number of hotels in use is now half what it was at the peak. We need to eliminate it entirely and we’ll do that within the lifetime of this Government, but we want to do it as quickly as possible.”
Reed also promised that progress on ending hotel use would be announced “within weeks,” revealing that the government is looking at “modular” building methods and the use of large sites, such as military bases, to house asylum seekers more efficiently. “You can use modular forms of building,” Reed explained, “That means it can go up much faster than would normally be the case, and there are planning processes that we can use in these circumstances to make sure that the planning system itself isn’t delayed.”
But the opposition wasn’t buying Labour’s narrative. Conservative MP Andrew Griffith, quoted in GB News, tore into the government’s handling of the issue, labeling the spending on migrant hotels as a “disgusting waste of money” and branding the situation “totally unacceptable.” The review, Griffith noted, concluded there was a “manifest failure” by the Home Office to properly manage contracts with private firms such as Serco and Clearsprings, who were charging up to £41 per person per night—often without caps or effective clawback mechanisms until recent months.
Meanwhile, the report exposed how the lack of pre-checks on local impacts led to community protests and service strains, particularly in places like Epping Forest and Trafford. The committee warned that simply promising to end hotel use—without a clear, credible plan for alternatives—risks “under-delivery and consequently undermining public trust still further.”
Labour’s solution? A pledge to end hotel use by 2029, shifting toward military bases such as MDP Wethersfield and Napier Barracks, and embracing modular housing to speed up the process. The government projects that these changes could yield £1 billion in savings by 2029, but the committee cautioned that without strict site vetting, 5% profit caps, and a faster application process to shrink the £8 billion backlog, the plan could easily fall short. The contracts for asylum accommodation have a break clause that can be activated from March 2026—a window the committee urged the Home Office to consider “urgently.”
For local communities, the financial pain is real. Analysis reviewed by Finance Monthly suggests the mismanagement has contributed to council tax increases of 3-5% annually and a £500 million NHS funding pinch last year alone, all linked to the pressures of migration and hotel accommodation.
As the dust settles on the report’s release, the government faces a tough road ahead. The committee’s message is clear: learn from past mistakes, set out a transparent and sustainable strategy, and restore public confidence by delivering a system that is “more locally led but better centrally controlled.” The coming weeks will reveal whether ministers can finally turn the page—or whether, as the committee warns, the cycle of “failed, chaotic and expensive” policy will continue to haunt both the Treasury and communities across the UK.
