Watchdog says asylum housing plans will cost millions more than hotels

Government plans for asylum accommodation will cost tens of millions of pounds more than using hotels, with flagship sites housing hundreds fewer migrants than planned, Whitehall's spending watchdog has found.

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.

The report, published today (Wednesday 20th March), 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".

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.

So far only Wethersfield - which has a capacity of 1,700 - and the Bibby Stockholm at Portland, 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.

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.

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."

Hear all the latest news from across the UK on the hour, every hour, on Greatest Hits Radio on DAB, at greatesthitsradio.co.uk, and on the Greatest Hits Radio app.