Asylum accommodation is one of the most pressing problems in the Home Secretary’s in-tray. Costs have soared, with the Home Office thought to be spending £8 million each day on hotels. Asylum-seekers are living for many months or sometimes years in unsuitable accommodation, unable to work and rebuild their lives. There has been local opposition to the housing of asylum-seekers in some parts of the UK and this summer saw the shocking scenes of asylum hotels being targeted by rioters. With an increase in asylum applications, pressures on the Home Office budget and a tight rental market, the Home Secretary faces many challenges. A new report from IPPR, Transforming Asylum Accommodation, sets out some possible options for change.
At the end of June 2024, nearly 97,000 asylum-seekers were being provided with housing by Home Office contractors. After they arrive in the UK, people seeking asylum are usually housed in initial (reception) accommodation, then moved into community-based dispersal accommodation – or hotels, hostels and former military bases. An increase in asylum applications since 2021 and now a backlog of 119,000 cases, together with a lack of rental accommodation, has meant that demand for community-based dispersal accommodation has outstripped supply. So the Home Office has been forced to use hotels – which are costly and have sometimes become the focus for far-right activity.
Housing is managed by three Asylum Accommodation and Support (AASC) contractors: Clearsprings Ready Homes, Mears and Serco. They organise transport, housing and subsistence, with many of these services delivered by sub-contractors. The AASC contract was worth £4.7 billion in 2023-24. It runs until 2029, with a break clause in 2026. Since its start in 2019 there have been numerous shortcomings in the contract, with key performance indicators missed and failures to deliver the required transport, accommodation and support and poor quality accommodation. Critics also point to weak accountability mechanisms, with providers not penalised for poor quality services.
There are many cases of asylum-seekers being moved to local authority areas without a council’s prior knowledge. This has made it difficult to provide support for people seeking asylum, but also to address residents’ questions and deal with tensions. With home ownership now out of the reach of many people, high rents and nearly 325,000 homeless households in England, the pressures that migration places on housing has emerged as a new fault line. Unless there is a proactive plan for asylum accommodation, there is a risk that this summer’s disorders will flare up again.
Faced with these problems, refugee organisations, housing experts and think tanks have been looking at future options. What should be the priorities for change?
Reducing the asylum backlog and speeding up decision-making is the greatest priority. This reduces the demand for expensive asylum accommodation. Those getting refugee status are then able to seek work and pay for housing themselves.
Organise a fairer dispersal system. Currently, accommodation tends to be concentrated in towns and cities in the Midlands and northern England, and in London. But in June 2024 some 134 of the UK’s 382 local authorities were housing fewer than 20 asylum-seekers. The Home Office and AASC providers should work with councils to find accommodation in more local authority areas. Pressures on schools and health services need to be addressed and social cohesion should be a fundamental consideration in asylum dispersal.
Consult communities before moving asylum-seekers into new dispersal areas. Those who threaten asylum-seekers must bear the full force of the law. But past experiences show that where communities are consulted about accommodation and can ask questions, this process often unlocks public consent for asylum accommodation and offers of help.
Give mayors and local authorities and civil society organisations a much greater role in the asylum accommodation system. AASC contractors and sub-contractors should always inform local authorities well in advance of placing asylum-seekers in their area. Failure to do this should result in financial penalties. Mayors, councils and civil society groups should be funded to organise integration support. They should encourage welcoming hubs that increase social contact between newcomers and receiving communities, offering activities such as English language conversation clubs and sport, advice and mentoring.
The government should work with councils and civil society to examine ways to improve the asylum accommodation system and what to put in place when the AASC contracts expire in 2029. Post-2029 options include giving a greater role to councils and civil society organisations to organise housing; better packages of pre-decision and move-on support for asylum-seekers; and strengthening users’ rights and accountability mechanisms.
Develop standards for the use of large-scale accommodation sites. Difficulties finding community-based accommodation means that the Home Office is continuing to look for large sties that it can use to house asylum-seekers. However, a report from the National Audit Office suggests that the cost of running these sites tends to be higher, per person, than housing in communities. Some of the ex-miliary bases that have been used in the past to house asylum-seekers have been in isolated rural areas, far from language classes and other support services. The IPPR report argues that if large sites are to be used, it should be for short-term accommodation only. There should also be minimum quality standards setting out the support services and activities that should be provided.
Pilot new schemes for housing asylum-seekers in communities. The success of the Homes for Ukraine scheme, where 74,000 people applied to host Ukrainian refugees, suggests there is scope to scale-up hosting schemes. There are some small-scale initiatives in the UK, where those with a spare bedroom offer somewhere for asylum-seekers and refugees to stay. In Germany, some asylum-seekers has been housed in the same accommodation as students, an initiative that has boosted asylum-seekers’ language learning and integration. Some university towns have surplus student housing stock, so this is an option in some areas.
Housing experts have also suggested piloting a capital subsidy programme, where councils and housing associations receive capital grants to buy or renovate properties specifically for temporary housing, saving the Government money on hotels. Under these proposals asylum-seekers, or homeless families, could be housed in former commercial properties that have been converted, or homes that lie empty prior to the regeneration of housing estates. Councils or housing associations could also buy unsold properties on the open market, using them as temporary accommodation for a period of time before turning them into general social housing stock.
With £8 million being spent every day on asylum hotels and £1.7 million on hotels for homeless people, it has been calculated that a £1.75 billion capital grant described above would pay for itself after seven months. While there are strong economic arguments for such schemes, public opinion may be an obstacle. As the housing experts’ proposal states, “Some voters might well ask, if money can be found to purchase and renovate homes from the market for asylum seekers, why not for British people?” Addressing asylum accommodation without improving services for homeless families risks causing resentment or worse.
But refugees could be part of the housing solution. Building more homes requires construction workers, yet there are 39,000 unfilled vacancies in this industry. Why not scale up existing training schemes, some of which are already reaching out to refugees, and recruit them as construction workers? Seeing refugees taking an active part in building new homes and renovating vacant high street sites could be one of a series of bold moves to help unlock public support for more community-based asylum accommodation.
Jill Rutter is an Associate Fellow of British Future
