UK asylum system to recover accommodation costs from eligible migrants

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UK asylum accommodation cost policy

Highlights

UK Immigration and Asylum Bill allows the Home Office to recover support and accommodation costs from eligible adult asylum seekers with repayments expected to total around £10,000.
The government reports asylum support cost taxpayers £4 billion last year, with 31 asylum hotels closed since April to reduce expenses by £1 billion.
Among refugees granted asylum between 2015 and 2023, employment rates rose from 25% in the first year to 50% after two years, with median full-time earnings of £23,000 after eight years.

Bill sets repayment rules for asylum support

As reported by GOV.UK, the Immigration and Asylum Bill introduced to Parliament today gives the Home Office new powers to recover support and accommodation costs from adult asylum seekers who are able to pay. The repayment is set to take the form of a flat-rate monthly charge above a threshold, with direct payments to the Home Office expected to be the main mechanism and other options through the tax and benefits systems also under consideration.

Migrants are required to clear the full amount before becoming eligible for settlement, while those who leave the UK are required to make payments if they want to return in future. Under the plans, the total contribution is expected to be around £10,000, although the Home Secretary has the power to adjust both the charge and the threshold.

Home Secretary Shabana Mahmood says the policy is designed to keep the system fair to taxpayers without pushing migrants into destitution. She says the government has already reduced asylum costs by £1 billion and argues that people who can contribute should repay some of the support they receive.

Pressure on public spending and labour market context

The government says asylum accommodation and support cost taxpayers £4 billion last year. It adds that 31 asylum hotels have closed since April, with hundreds of asylum seekers moved into basic accommodation, including ex-military sites, as part of a broader effort to cut spending.

Home Office estimates put the average nightly accommodation cost at £23.25 per person in dispersal housing and £144 in hotels, while weekly subsistence payments range from £9.95 to £49.18 per person. Ministers say requiring repayments from those on a path to settlement helps offset these costs and places more financial responsibility on those who remain in the country.

The bill is also presented against evidence that a growing share of refugees move into work after receiving status. A quarter of refugees aged 16 to 64 granted asylum between 2015 and 2023 are in employment within the same calendar year, rising to 50% after two years, while among those working eight years after the grant, 37% are in full-time jobs with median earnings of £23,000.

Our earlier report on the UK’s £15bn defence spending uplift examined the government’s plans to raise military investment over four years, including more than £5bn earmarked for drones. We also noted that procurement constraints, delays and cost overruns could limit what higher budgets deliver in practice, with delivery milestones in several programmes still unclear.

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