How Will Labour Meet Its Promise To Close Asylum Hotels?
HMP Northeye, pictured in 2023 (PA Images / Alamy)
7 min read
After a summer of protests outside hotels housing asylum seekers, the government is under renewed pressure to find alternative accommodation. What are its options? Noah Vickers reports
The choices in front of Home Secretary Shabana Mahmood, when it comes to Britain’s asylum system, are not only political but logistical too. The Home Office has a statutory duty to provide accommodation for destitute asylum seekers. But the system through which it discharges that duty has been under sustained pressure for years, and with a record-high of 111,100 people claiming asylum in the year to June 2025, that is unlikely to change.
More than 32,000 asylum seekers are currently accommodated in hotels – a legacy of the backlog of asylum claims that built up under the last government. Labour had promised to end the use of hotels by the end of the current parliament in 2029, but Prime Minister Keir Starmer has said he wants to “bring forward” that deadline.
Yet in their search for locations that have less “impact on communities”, as the Home Office puts it, ministers will be forced to balance a range of competing factors, including cost, speed of procurement and equity of dispersal. What will they choose?
Military and other large sites
In early September, the government confirmed it was exploring the use of Ministry of Defence (MoD) sites as a form of temporary asylum accommodation.
This is a not a new idea, and was already being pursued by the previous government. The main issue the Conservatives encountered with these sites was that they repeatedly underestimated just how much work – and expense – would be required to set them up and operate them.
As recently as June this year, the then-asylum minister Angela Eagle was telling the Home Affairs Select Committee that military sites can be riddled with serious safety issues. When officials had looked at them in the past, she said, “they had asbestos-filled buildings, poisoned land, unexploded ordinance and all those sorts of things on old army bases”.
She added: “A lot of the experience of trying to bring large sites into use… demonstrated that lots of money, far greater expenditure than was expected, was not delivering many rooms.”
A March 2024 investigation by the National Audit Office (NAO) revealed that RAF Wethersfield in Essex was initially forecast to be £66m cheaper than the equivalent use of hotels over the course of its planned deployment until 2027, but revised estimates put the saving at only £500,000.
Even worse was the situation at RAF Scampton in Lincolnshire, which was actually losing the Home Office money compared with hotels. It was originally envisaged to be £5m cheaper than using hotels, but would have ended up costing £45m more, if it had been used as planned through to 2028.
In the event, Scampton was closed by Labour on value-for-money grounds in September 2024, without it ever having hosted a single asylum seeker. At least £48m had been spent on it by the time it was shut, and defence minister Luke Pollard has refused to rule out re-opening it as part of the government’s renewed search for MoD sites. Wethersfield, on the other hand, remains in active use.
Another lesson from the past can be found at HMP Northeye, a derelict prison in East Sussex which, in 2023, the Home Office rushed to purchase for £15.4m – more than double what the previous owners, Brockwell Group Bexhill LLP, had paid for it 12 months earlier.
According to the Public Accounts Committee, it did this “despite clear warnings that the site would require significant remediation work” due to asbestos contamination, and it was therefore never used for asylum seekers.
As Labour ministers and their officials are under time pressure to find alternatives to hotels, it is episodes like Northeye that they will need to keep at the front of their minds.
“I understand why they want to move quickly, and they should, but I do think moving quickly when it comes to these large sites is a high risk option, based on previous experience,” says Marley Morris, associate director for migration at the IPPR think tank.
“I would definitely exercise caution if I was in the Home Office considering purchasing, or making any major financial commitments on renovating, these MoD sites, because we’ve got very direct, recent experience of when the government has made mistakes in this regard.”
Medium-sized sites
In June, Eagle had said that instead of military locations, the government was searching for “medium-sized sites” – a search thought to be ongoing. According to Eagle, these sites include “voided tower blocks, old teacher training colleges or old student accommodation that are not being used, where you could have more rooms than you can get with dispersed accommodation”.
Morris tells The House that places like these could be “sensible, short-term options” for the government.
“The challenge obviously is that there might be limited sites available. They need to identify quite a significant number of bed spaces to move people out of hotels,” he says.
As with the military sites, however, there are likely to be significant costs associated with bringing these places into use. After all, many of these buildings have become disused for a reason, and some of those reasons may be safety-related.
In Huddersfield, the last government had been looking to procure two student accommodation blocks as part of its ‘large sites’ programme.
Labour has not cancelled the Huddersfield scheme, but nor has it yet opened it to any of the planned 670 asylum seekers. Instead, the site remains unoccupied.
Asked by The House what was causing the ongoing delay, the Home Office said no asylum seekers would be moved in “until planning permission is obtained and it is ready for occupancy, including meeting legal and building regulations”.
Flats, HMOs and other dispersal accommodation
Most asylum seekers – about 64 per cent of those receiving accommodation support – are currently living in ‘dispersal accommodation’ rather than hotels. This generally consists of houses, flats and rooms in homes of multiple occupation (HMOs).
One of the main issues that ministers will have to tackle with this type of accommodation is the conflict between cost efficiency and equitable distribution.
As with the hotels, dispersal accommodation is sourced by the Home Office’s three private contractors: Serco, Mears and Clearsprings.
In 2023, the Conservatives introduced a ‘full dispersal’ system, meaning that areas which had previously not accommodated asylum seekers would have to play their part in hosting some.
While that initiative was partially successful, as it substantially reduced the number of local authority areas with no dispersal accommodation, the overall distribution of asylum seekers remains far from equitable.
“Essentially, they [the Home Office’s contractors] are tasked with finding the cheapest accommodation for asylum seekers, and what that means in essence is that they find the cheapest parts of country, which are then often quite poor and deprived,” says Chris Naylor, the former chief executive of Barking and Dagenham council.
Naylor is among those urging the government to sever its relationship with the contractors and instead move to a decentralised system in which councils are given powers and funding to source the accommodation themselves.
Instead of the current system, in which the contractors lease accommodation from private landlords, Naylor argues that the money should instead be given to councils to build new properties or purchase existing homes for asylum seekers. Those homes would become permanent assets for the local authority – which could use them in future as emergency accommodation for homeless people or as council housing.
Anthony Okereke, executive member for communities at London Councils, believes that devolving the system to local authorities would also mean better safeguarding for unaccompanied asylum-seeking children.
“You can’t just leave it on one provider,” Okereke, Labour leader of Greenwich council, tells The House. “The provider doesn’t have the specialism that we need in terms of safeguarding. We do. We get it. This is our bread and butter – it’s our business. So we believe that they should be working closely with us, not a provider.”
The Home Office signed a 10-year agreement with the contractors in 2019, but in 2026 the government will have the option of using a break clause to end those contracts early. The Home Office refuses to say whether ministers are considering this option.
Addressing the government’s wider strategy to asylum, however, a Home Office spokesman told The House: “We have committed to close all asylum hotels and to achieve this, we will look at a range of more appropriate sites like disused accommodation, industrial and ex-military sites so that we can reduce the impact on communities.
“We are working closely with local authorities, property partners and across-government so that we can accelerate delivery and more detail will be set out in due course.”
