UK ‘squandered’ billions on flawed asylum housing system

London: Britain has “squandered billions” on housing asylum seekers as a result of “flawed contracts” and unsuitable accommodation, a parliamentary report said Monday.

The scathing report piles further pressure on Prime Minister Keir Starmer to address immigration woes, after the weekend headlines were dominated by the manhunt for an asylum seeker and convicted sex offender who was accidentally released early from prison.

Ethiopian migrant Hadush Kebatu was sentenced to 12 months in prison for sexually assaulting a teenage girl and a woman, in a case which sparked large-scale anti-immigration demonstrations this summer.

Protesters targeted hotels contracted by the Home Office to house migrants while they await a decision on their asylum applications.

Kebatu was re-arrested on Sunday.

A sharp rise in asylum seekers being housed in government-paid accommodation - from 47,500 at the end of 2018 to 103,000 in June 2025 - for long periods has fuelled public anger.

The Home Affairs Committee found that the expected cost for asylum accommodation from 2019-2029 has more than tripled, from GBP4.5 billion ($6 billion) to GBP15.3 billion ($20.4 billion).

While the use of hotels for this purpose has decreased from its peak in 2023 during the previous Conservative administration, the Home Office is still “heavily reliant” on the costly option, according to the report.

More than 32,000 migrants are currently said to be housed in hotels, according to home office figures.

“Hotels went from a temporary stop-gap to the go-to solution for asylum accommodation, leading to a failed system that is expensive, unpopular with local communities and unsuitable for asylum seekers,” the parliamentary committee said.

Several local communities have expressed concerns about safety as well as about the use of hotels for temporary accommodation rather than tourism.

Migrant rights groups have also criticised contractors for failing to meet adequate hygiene standards and making profits while providing cramped accommodation.

The report found that the Home Office “failed to ensure that the service delivered by providers consistently meets the required standards”.

Starmer’s Labour government has committed to ending the use of hotels in the asylum system by 2029, as it attempts to cut a big backlog in asylum applications.

The Ethiopian migrant Kebatu, who had been housed in the Bell Hotel, Epping, was found in a London park on Sunday after being wrongly released from prison and was re-arrested. Government officials have said he will be deported this week.

Justice Secretary David Lammy will lay out in parliament measures to strengthen prisoner release checks later Monday, after a government minister told broadcasters the justice system was “broken”.