Government asylum housing plans to cost millions more than hotels – watchdog

The National Audit Office (NAO) said the Home Office expects to spend £1.2 billion on housing asylum seekers in large accommodation sites and latest estimates suggest they will cost £46 million more than using hotels.

By the end of March, the department expects to have spent at least £230 million developing four major projects – the Bibby Stockholm barge in Portland, Dorset, the former RAF bases at Scampton in Lincolnshire and Wethersfield in Essex, and ex-student accommodation in Huddersfield, West Yorkshire.

But, so far, just two of the sites are open and were only housing around 900 people by the end of January, according to the watchdog’s findings.

It comes as ministers have scaled back the number of asylum seekers due to be housed at the former home of the famed 617 “Dambuster” Squadron and the Red Arrows near Lincoln from 2,000 to 800.

The NAO findings reveal the Home Office is also considering cutting the maximum number of migrants housed at Wethersfield.

The report, published on Wednesday, comes in the wake of ex-home secretary Dame Priti Patel telling the Commons last week that the Government’s asylum accommodation system is in need of reform and there are “serious questions” to be asked of her former department.

Head of the NAO Gareth Davies said: “The Home Office has made progress in reducing the use of hotels for asylum accommodation. Yet the pace at which the Government pursued its plans led to increased risks, and it now expects large sites to cost more than using hotel accommodation.”

The department pursued the programme despite “repeated” assessments that it “could not be delivered as planned”, Mr Davies warned as he called on the Home Office to “reflect on lessons learned from establishing its large sites programme at speed and improve co-ordination with central and local government given wider housing pressures”.

Labour’s shadow home secretary Yvette Cooper branded the findings “staggering,” adding: “The British taxpayer is already paying out eye watering sums on asylum hotels and now it turns out the sites they promised would save money are costing the taxpayer even more. Rishi Sunak has taken the Tories’ chaos and failure in the asylum system to a new level.”

Chief executive of the Refugee Council Enver Solomon described it as “another alarming example of bad policies being implemented badly at huge financial and human cost”, while Steve Smith, the boss of migrant charity Care4Calais which is taking legal action over the use of Wethersfield for asylum accommodation, added: “Someone in Government has to be held accountable for the fear and trauma they have created.”

But the Home Office insisted its plan was better value for money for the taxpayer than continuing to use hotels.

While the Government has “made progress” by cutting the number of hotels to house asylum seekers, and had stopped using 60 by the end of January, it has “incurred losses and increased risk” by “rapidly progressing its plans to establish large sites”, the NAO said.

“The Home Office originally assessed that large sites would be around £94 million cheaper than hotels. Its latest estimates suggest they will cost £46 million more than using hotels, although the Home Office believes they will provide more appropriate and sustainable accommodation,” the watchdog added.

According to the findings, the Home Office originally estimated set-up costs at the former RAF bases would be £5 million each but they increased to £49 million for Wethersfield and £27 million for Scampton.

So far only Wethersfield – which has a capacity of 1,700 – and the Bibby Stockholm, with space for around 500 men, are housing asylum seekers.

But both sites were housing just under half the number of migrants the Home Office expected would be the case at the end of January, with 576 at Wethersfield and 321 on the Bibby barge at that point.

According to the report, the Home Office is “now considering reducing the maximum number of people it accommodates” at Wethersfield but has not confirmed the number.

The department expects Scampton to start housing asylum seekers from April, with Huddersfield following in May, it added.

The NAO also found:

– Reviews by the Infrastructure and Projects Authority rated the Home Office’s work in this area as “red”, meaning “successful delivery of the programme to time, cost and quality appears to be unachievable”.

– The Home Office rated its own performance as “red” as it recognised the challenges of the work, repeatedly revising accommodation targets “downwards”.

– The department “prioritised awarding contracts quickly, and modifying existing contracts over fully-competitive tenders”, with “overly-ambitious accommodation timetables” leading to “increased procurement risks”.

– Emergency planning rules were used so sites could be found, and work could begin, quickly before speaking to affected communities about the plans to “reduce the risk of local opposition affecting negotiations”. In January the Home Office was “still working with providers to develop specific measures assessing residents’ safety at large sites”.

– The Home Office is “resetting” its programme and developing a “longer-term accommodation strategy” which will see it reduce the number of spaces it intends to provide at such sites amid proposals to “identify smaller sites accommodating between 200-700 people”. Mr Davies said this plan “makes sense”.

– There are “uncertainties” about how the Illegal Migration Act is being implemented, making it harder for the Home Office to assess what asylum accommodation it needs. The report said the law changes will make it “more difficult to assess how much and what type of accommodation the Home Office will need” as it does not know how effective the deterrent will be or how it will affect the amount and type of accommodation it needs.

On Monday it emerged that Home Office minister Tom Pursglove had confirmed in a letter to Gainsborough Conservative MP Sir Edward Leigh that the “regular occupancy” at RAF Scampton would be a maximum of 800 asylum seekers instead of the original 2,000 men destined for the site which has been beset by legal challenges.

A Home Office spokeswoman said: “While the NAO’s figures include set-up costs, it is currently better value for money for the taxpayer to continue with these sites than to use hotels.”

It was “unacceptable” to use hotels, the department said as it stressed it had acted “swiftly” to find alternative solutions.

Its efforts mean the cost of hotels will fall, the Home Office promised, as it said it was “closing dozens of asylum hotels every month”, adding: “But we have further to go, which is why 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.”