Press Story

Reliance on hotels has led to asylum accommodation and support costs soaring from £17,000 per person in 2019/20 to £41,000 in 2023/24

Muhammad said: “Asylum accommodation traps people in unhealthy, unsafe conditions”

IPPR recommends a new decentralised model with regional bodies managing dispersal accommodation

The escalating costs and poor standards of accommodation provided to people seeking asylum in the UK can be halted and reversed by ending national outsourcing contracts with private companies and instead decentralising budgets and powers to regional bodies, according to a new report from the Institute for Public Policy Research (IPPR).

New analysis conducted by the think tank finds that the average annual cost of housing and supporting an asylum seeker has soared from £17,000 per person in 2019/20 (adjusted for inflation) to approximately £41,000 in 2023/24. This comes as the overall cost of the system has risen from £739 million in 2019/20 to an expected £4.7 billion in 2023/24.

The report says much of this increase in cost has been driven by the slow processing of asylum claims and the growing backlog under the previous government. This has left people stuck in contingency accommodation (hotels) – which 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).

As costs have increased, the quality of provision has not. IPPR spoke to people who, in some cases, spent up to eight years trapped in asylum accommodation, and spoke of unsanitary living conditions compromising their health and well-being.

One person said: “We will stay in the room [with] four in the room, just one room, no cleaning, no bedsheet.”

Others spoke of harassment from staff, unsafe conditions for children, and unbearable isolation.

This comes in the divisive context of recent racially motivated riots which targeted asylum accommodation.

Since 2019, asylum accommodation has been outsourced from the Home Office to three private providers: Clearsprings, Mears and Serco. These contracts come to an end in 2029, with a break clause in 2026. IPPR says this offers a critical opportunity for the government to implement decisive reform, but they need to act with urgency to take advantage of the contract break clause and develop a new approach.

The progressive think tank proposes a new blueprint for reforming asylum accommodation to bring down costs as well as improve standards, which includes:

Decentralising asylum accommodation and support services to regional bodies who are better placed to find more affordable dispersal housing

Immediately closing any remaining failing large sites and strengthening accountability and oversight of private companies to improve standards in the short term – this should include significant penalties for non-compliance

Providing integration from day one, including services like English lessons, skills training, and community engagement

Dr Lucy Mort, senior research fellow at IPPR, said:

"The asylum accommodation system is in urgent need of reform. It’s costing far too much 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 challenged for regional, local and devolved government.

“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."

Muhammad, an asylum seeker, said:

“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.”

Leader of Brighton & Hove City Council, Cllr Bella Sankey, said:

“I welcome this report from IPPR, which makes a compelling case for urgently ending the outsourcing contracts with private companies for asylum accommodation.

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

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

“In Brighton & Hove, we are committed to doing everything we can to foster a welcoming environment and direct support for asylum seekers and refugees. We stand ready to work with the new government to pilot a reformed model and provide a system of wrap around support that enables successful move on and community cohesion.”

ENDS

Dr Lucy Mort and Marley Morris, the report’s authors, are available for interview

CONTACT

Liam Evans, Senior Digital and Media Officer: 07419 365334 l.evans@ippr.org

Georgia Horsfall, Digital and Media Officer: 07931 605 737 g.horsfall@ippr.org

NOTES TO EDITORS

The IPPR paper, Transforming Asylum Accommodation by Dr Lucy Mort and Marley Morris, will be published at 00:01 on Thursday 24 October. It will be available for download at: http://www.ippr.org/articles/transforming-asylum-accommodation
Advance copies of the report are available under embargo on request
IPPR (the Institute for Public Policy Research) is an independent charity working towards a fairer, greener, and more prosperous society. We are researchers, communicators, and policy experts creating tangible progressive change, and turning bold ideas into common sense realities. Working across the UK, IPPR, IPPR North, and IPPR Scotland are deeply connected to the people of our nations and regions, and the issues our communities face. We have helped shape national conversations and progressive policy change for more than 30 years. From making the early case for the minimum wage and tackling regional inequality, to proposing a windfall tax on energy companies, IPPR’s research and policy work has put forward practical solutions for the crises facing society. www.ippr.org