A parliamentary committee has criticized the Home Office for wasting billions on asylum hotels due to flawed contracts and poor management, with costs soaring from £4.5 billion to £15.3 billion over a decade.

As of June 2025, around 103,000 asylum seekers are housed in hotels, mostly in southern England, where contract costs have increased significantly, and the number remains above pre-pandemic levels.

The committee highlighted that the focus on high-risk policies like the Rwanda scheme diverted attention from effective contract oversight, contributing to spiraling costs and neglect of due diligence.

This systemic failure has damaged public trust, with political leaders criticizing the system's incompetency and calling for urgent reform amid ongoing debates on immigration and public safety.

The report emphasizes the need for a clear, long-term strategy to replace the current, failed system, advocating for a model that offers better value for money and effectiveness.

Charity leaders stress that reliance on hotels wastes taxpayer money, endangers vulnerable asylum seekers, and hampers safeguarding, urging the government to improve processing and decision-making.

The distribution of asylum accommodation has been uneven, often concentrated in deprived areas, leading to social tensions, which the committee recommends addressing through fairer, more transparent policies.

Community cohesion issues have arisen at hotels like the Bell Hotel in Epping, where protests and safety concerns are partly due to lack of engagement and transparency from the Home Office.

Prime Minister Sir Keir Starmer has pledged to end the use of asylum seeker hotels by 2029 due to soaring costs and community protests, but MPs warn that without a clear long-term plan, public trust could further erode.

Key contractors involved include Serco, Clearsprings, Mears, and the Australian firm CTM, which manages a £550 million hotel contract linked to the Bibby Stockholm barge, though not all contracts have been scrutinized.

The wrongful release of convicted sex offender Kebatu after a mistaken release from prison has highlighted systemic issues, with MPs calling for a national investigation into systemic failures.

The report suggests that the end of current contracts and break clauses present an opportunity for the Home Office to overhaul the system, moving towards a more effective model that delivers value and avoids past failures.