How plan to save money on asylum hotels is costing £46m extra

Large accommodation sites for asylum seekers, like RAF Scampton, were supposed to save the taxpayer money.

That’s what the Government has told us repeatedly, pointing out that the alternative - housing asylum seekers in hotels - costs millions of pounds a day.

It was the line the Home Office used to quell opposition from local communities and concerns from refugee charities and human rights groups.

Time and again it issued a stock response to questions about how migrants were being housed: "The use of hotels to house asylum seekers is unacceptable - there are currently more than 51,000 asylum seekers in hotels costing the UK taxpayer £6million a day.

"The use of hotels is a temporary solution, and we are working hard with local authorities to find appropriate accommodation."

But today, a report from the spending watchdog the National Audit Office (NAO) proved that the claim its alternative plan would save money was incorrect.

In reality, these mass accommodation sites will cost more than hotels - about £46 million more, according to the NAO.

Have you heard our new podcast Talking Politics? Every week Tom, Robert and Anushka dig into the biggest issues dominating the political agenda…

One of the key reasons is that the Government massively underestimated how much it would cost to get these sites up and running.

The Home Office initially expected to spend around £5million to refurbish RAF Scampton and get it ready for asylum seekers to move in. In the end, they spent £27million.

That means, according to the NAO’s calculations, the Scampton plan will cost £45million more than hotels.

Another mass accommodation site in Huddersfield was initially expected to save £23million, but will in fact cost £2million more than using hotels.

£2.9million spent on a third site in our region - the former RAF base at Linton-on-Ouse - has been lost, after the project got cancelled.

Given the controversy that has plagued the Government’s plans for sites like Scampton from the start, the NAO’s report presents a pretty damning picture.

And, it turns out, that’s only the best case scenario.

The report is based on the Home Office’s costings for filling mass asylum sites to their maximum capacity.

But those capacities are now being reconsidered.

RAF Scampton was initially supposed to house 2,000 asylum seekers, but that’s now been revised to 800.

As the NAO report acknowledges, that’ll make the cost-benefit analysis even more dire.

The Government’s defence is that using hotels to house asylum seekers is “unacceptable.”

A spokesperson for the Home Office said: “We have always been clear that the use of asylum hotels is unacceptable, and that’s why we acted swiftly to reduce the impact on local communities by moving asylum seekers onto barges and former military sites.”

It’s true that "asylum hotels" have also faced fierce opposition; hoteliers in Skegness told ITV Calendar that they’ve lost business because some hotels in the town are housing asylum seekers.

So for some, news that the Government plans to close its 100th such hotel this week, down from 400 which were in use last October, will be welcome.

But the Government’s outrage that asylum seekers were being given four-star hotel accommodation now looks like gesture politics.

Housing migrants in a barge like the Bibby Stockholm, or on a former military base, makes the Government might look tougher in the eyes of some - but if it costs more, it’s difficult to justify.

In response to the report, the Government has doubled down on its asylum centre plan will save money.

The Home Office’s own value assessment excludes “sunk” costs of around £199 million i.e. what’s been spent already preparing sites for migrants to move in, and thereby concludes they’ll be £153 million cheaper than hotels.

That’s a bit like saying a mortgage is cheaper than renting, but not counting the deposit you need to buy a house in the first place.

Considering it’s the taxpayer footing the bill of this "deposit", many might not be as optimistic as the Government.

A Home Office spokesperson also told us: “We are passing the Safety of Rwanda Bill, deterring Channel crossings and get flights off to Rwanda - because it is only when people are discouraged from taking those journeys that we can end asylum hotel use for good.”

The Rwanda plan is currently stuck in a ping-pong match between the House of Lords and the House of Commons, but the Government hopes it’ll deter migrants from coming to the UK.

By the Government’s own assessment, though, the plan would need to deter 37% of people who would otherwise have arrived in the UK, just to break even.

"Stop the Boats" is one of Rishi Sunak’s five priorities - something he’s promised the public again and again.

He may find his Government lives or dies by the success of that pledge.

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know.