Written evidence submitted by The Institute for Public Policy Research (AAC0102)
1.1 The Institute for Public Policy Research (IPPR) is an independent charity working towards a fairer, greener, and more prosperous society. Over the last two years, IPPR has conducted in-depth research on the asylum accommodation system, culminating in our report Transforming Asylum Accommodation, published in October 2024. This submission draws on that research,[1] as well as subsequent engagement with stakeholders, to provide an overview of the current system’s failings, its impact on local areas, and recommendations for urgent reform.
1.2 We welcome this inquiry from the Home Affairs Select Committee, particularly as the 2026 break clauses in the current asylum accommodation contracts present a critical opportunity for change. The evidence is clear: the UK’s asylum accommodation system is at breaking point - characterised by spiralling costs, poor living conditions, and a lack of accountability.
1.3 The financial burden of the current approach is unsustainable. In 2023/24 alone, the government spent £4.7 billion on asylum support, with £3.1 billion allocated to hotels - an emergency measure that has become the default despite being costly and unsuitable. According to the National Audit Office (NAO), the Home Office estimated that hotel accommodation costs rose to £145 per person per night by early 2023, compared to just £14 per night for dispersal accommodation (Mort and Morris 2024).[2]
1.4 Between 2019/20 and 2023/24, accommodation and support costs increased nearly sixfold, despite the number of supported asylum seekers doubling during the same period. This has driven a sharp rise in the average annual cost per asylum seeker - from approximately £17,000 in 2019/20 [3] to £41,000 in 2023/24. These escalating costs are driven largely by the shortage of available dispersal accommodation, which has forced the government to rely heavily on more expensive contingency options such as hotels.
1.5 At the root of these issues are systemic inefficiencies and delays. The growing backlog of asylum applications - worsened by policy decisions under the Illegal Migration Act - has significantly slowed processing times, leaving thousands of people stuck in unsuitable accommodation for extended periods.
1.6 However, the impact of the current approach is not only financial. The quality of accommodation remains poor, with overcrowding, inadequate facilities, and safeguarding concerns widespread across the system. These conditions exacerbate trauma, harm mental health, and hinder integration efforts. Furthermore, the incoherent and opaque distribution of asylum accommodation has fuelled community tensions, with local authorities forced to manage service pressures with little notice, consultation, or funding.
1.7 Asylum accommodation must be urgently reformed. The 2026 contract break clause presents a critical opportunity, we argue, to decentralise the system, empower local and regional bodies, and create a more sustainable, cost-effective, and humane approach.
2.1 COMPASS
2.1.1 The shift towards privatising asylum accommodation in 2011 – up to then provided via a mixed economy of local authority consortia and private companies – aimed to deliver cost efficiencies through centralising the management of asylum accommodation provision.
2.1.2 In 2012, the Home Office awarded the COMPASS contracts - delivered by Serco, G4S, and Clearel – for an initial five-year period. However, significant concerns were raised by the NAO, Home Affairs Select Committed (HASC) and the Independent Chief Inspector of Border and Immigration (ICIBI) citing failures to meet performance standards, substandard housing conditions, and inconsistent oversight and inspection processes.
2.1.3 Despite underperformance and documented failures, the COMPASS contracts were extended for a further two years. This extension included a significant financial uplift – not to improve services but to offset losses incurred by private providers in the preceding years.
2.2 AASC and AIRE
2.2.1 In 2019, the Asylum Accommodation and Support Services Contracts (AASC) and the Advice, Issue Reporting and Eligibility Assistance (AIRE) contract replaced COMPASS. The AIRE contract introduced a separate, independent provider (Migrant Help) to deliver asylum advice and assistance, aiming to enhance support for asylum seekers.
2.2.2 These next generation contracts aimed to address the shortcomings of COMPASS, with key changes ostensibly including:
2.2.3 However, in practice, fundamental issues remain:
2.2.4 As the table below illustrates (Mort and Morris 2024), the inspection framework for asylum accommodation is fragmented, leading to inconsistent monitoring and limited enforcement of standards.
Form of monitoring/inspection | Description | Frequency | Strengths | Limitations | ||
Self-inspections by private providers | Providers inspect properties monthly and report on compliance with contractual standards to the Home Office. Further inspections are required if maintenance issues are identified. | Monthly
| Regular internal checks, established monitoring processes. | Potential bias; providers may underreport to avoid penalties. Lack of independence. | ||
Home Office inspections | The Assurance Team conducts spot-check inspections to ensure compliance with contractual standards. Inspection capacity has increased but remains inconsistent. | Historically aimed to inspect one-third of properties annually; frequency has dropped by 45 per cent in recent years (Wilding et al 2024). | Holds contracts and can enforce penalties directly. | Underresourced, infrequent and sometimes inconsistent in quality. Only one officer was responsible for more than 70 hotels in London. | ||
Local authority inspections | Inspections by environmental health officers, fire and rescue services, and HMO licensing checks. | Ad-hoc, often reactive based on complaints. |
| Inspections are not systematic and often occur after issues have escalated. Poor coordination with the Home Office. | ||
ICIBI inspections | Independent inspection of the Home Office’s management of asylum accommodation, including large sites and contingency accommodation. Reports are submitted to parliament. | Irregular, with several years between inspections.
| Provides independent and comprehensive assessments.
| Limited frequency due to broad remit and resource constraints. Reports can be limited in terms of immediate impact.
|
2.2.5 As can be seen in the table above, a small compliance team within the Home Office means that inspections of providers are infrequent, limiting oversight and accountability. Furthermore, the near-oligopoly of asylum accommodation providers - Serco, Mears, and Clearsprings - leaves the Home Office with few alternatives, reducing its ability to effectively challenge or penalise poor performance.
2.3 Spiralling costs and overreliance on hotels
2.3.1 Despite the intended improvements of the AASC contract, asylum accommodation costs have soared, while the quality has stagnated or worsened. The reliance on hotels has led to severe physical and mental health consequences for residents.
2.3.2 The AASC contracts were originally valued at just over £4.5 billion over their 10-year lifetime, yet within just five years, the Home Office has already spent twice that amount on asylum accommodation.
2.3.3 Several factors contributed to the huge increase in hotel use:
2.4 Large-scale sites
2.4.1 In an effort to address the costly and politically charged use of hotel accommodation, the Conservative government opened a number of large sites, including barracks and barges. However, these facilities – as well as being harmful to residents – are financially counterproductive, with the NAO (2024) reporting that large sites would cost £46 million more than hotels over their lifespan.
3.1 Accommodation standards
3.1.1 Multiple reports, including findings from the ICIBI, NAO, academic and third-sector organisations, have highlighted the poor quality of asylum accommodation. Our research found that people seeking asylum were often living in unsanitary and unsafe conditions, commonly facing issues such as mould, damp, rodent infestations, and broken heating. Participants in our research described significant delays in repairs, often waiting months for essential fixes to heating, leaks, and sanitation.
3.1.2 Many, particularly those in contingency hotel accommodation, spoke of overcrowding, with families and unrelated individuals forced to share inadequate living spaces, leading to concerns about hygiene, as well as a chronic lack of privacy. As one asylum seeker in Scotland told us:
“We will stay in the room [with] four in the room, just one room. No cleaning, no bedsheet, you will sleep on that bedsheet for a month.”
3.1.3 For families living in hotel accommodation, there is often nowhere to receive visitors, and no dedicated place for children to play or do school homework. Limited food choices and, for many, no access to kitchen facilities made it difficult for people to eat healthy, nutritious meals, and many were concerned for their children’s wellbeing.
3.1.4 The inadequate provision of basic essentials, such as clothing, footwear and hygiene products – including menstrual products for women – were compounded by very low asylum rates, which meant that many had to rely on handouts. The British Red Cross Crisis Team, for instance, used £220,000 from their Disaster Fund – typically to help relieve crisis situations – to provide clothing for 12,000 people in asylum hotels, with around half of referrals direct from accommodation subcontractors or Migrant Help.
3.1.5 Women that we spoke to faced specific gendered issues. For those in shared mixed-gender accommodation, several spoke of feeling uncomfortable using the shared bathrooms, with reports of them using either using public facilities elsewhere, keeping a ‘personal bucket’ for more private use, or even refraining from drinking water in order to require the toilet less often. Women from Bloody Good Period’s Experts-By-Experience group spoke of being unable to access menstrual products in a respectful or dignified manner, being given unsuitable products, or being harassed by male staff for requesting products.
3.2 Lack of meaningful stakeholder engagement
3.2.1 We heard that accommodation providers routinely fail to engage meaningfully with local authorities, NGOs, and asylum seekers themselves, leading to poor service coordination and inadequate accountability. Local councils frequently report receiving little notice before asylum seekers are placed in their areas, making it difficult to plan appropriate service provision.
3.2.2 Asylum seekers themselves are rarely consulted about their accommodation. People with lived experience describe feeling powerless, with insufficient avenues to raise concerns or challenge poor conditions. We heard that frequent changes in housing officers mean that concerns are rarely followed up on, leaving asylum seekers reluctant to report ongoing issues. As one asylum seeker told us:
“I’ve had, like, five different housing officers. Now I’ve got a new one again, and I’ve not even started telling her about the issue, because when you’re sick and tired about things like [this], [ you think] let me just leave it. I’m not going to make any complaint again. If I can’t sleep in the house, then I’ll find [elsewhere] to sleep.”
3.3 Safeguarding failures and mental health impact
3.3.1 The safeguarding failures within asylum accommodation have led to serious risks for residents, particularly women, LGBTQI+ individuals, and young people. Reports from charities and campaign groups document frequent harassment, inadequate protections for vulnerable individuals, and failures in oversight. The failure to provide adequate age assessment processes has led to young people being wrongly placed in adult accommodation, leaving them at risk of exploitation and neglect. One participant in our study described their discomfort at being forced to share a room with a young person, raising serious concerns about privacy and protection for both parties:
“I was sharing a room with a minor, so that was quite shocking to me, to share the room, the accommodation with a minor person, and nothing was done to have him his own privacy as well as protection.”
3.3.2 Women housed in mixed-gender accommodation have also reported incidents of sexual harassment, including men knocking on their doors and making unwanted advances. One woman explained how inadequate safeguards led to severe distress and health problems:
“They brought me to another accommodation, like a hostel, and totally, the accommodation is dirty, smelly, and I don’t feel protected staying there, because I get a sexual harassment in there because they mix and match in that floor. So, I need to share the toilet, and whenever I go out, the men who are outside there, they used to call me, they used to come and knock the door, and later, I had a UTI problem – urinary tract infection.”
3.3.3 Our research pointed to profound mental health impacts of prolonged stays in asylum accommodation, particularly in hotel and large site accommodation - is profound. Overcrowding, lack of privacy, and the uncertainty of legal status have created widespread mental health crises, with many residents experiencing severe anxiety, depression and suicidal thoughts. One participant described how their insomnia and feelings of degradation led to suicidal ideation, stating:
“For me, I got insomnia when I was in the hotel, and I feel degraded, I feel disrespected. It’s impacted my mental health so much ... There were times I think of suicidal thoughts, think of taking my life, but I had just one hope ... that I have a family. That was the only thing that was keeping me going … Up till now, I’m still battling with the trauma and the stress.”
4.1 The asylum dispersal model was initially introduced to prevent the overconcentration of asylum claimants in London and the South East. Originally voluntary, dispersal relied on local authorities choosing to participate. In recent years, the government has moved towards a model of mandatory full dispersal, grouping local authorities by region and assigning them a share of the total asylum cohort based on population size. The stated aim is to achieve a fairer distribution by 2029 (House of Commons Library 2023). However, progress has been slow, due to local authority reluctance and the significant variation in housing costs across the country.
4.2 Despite its aims, dispersal remains driven by central government decisions, with limited input from local authorities. Councils often have little advance notice or ability to plan for the arrival of asylum seekers, which undermines their capacity to coordinate housing, services, and local integration efforts. Unlike Germany, which uses the Königstein Key, the UK lacks a transparent system to ensure fairness and sustainability in placement decisions. The Königstein Key is a structured formula used to allocate asylum seekers across Germany's federal states, taking into account both regional population size (weighted one-third) and tax revenue (weighted two-thirds). This ensures a more even distribution that aligns with local resources and labour market conditions, reducing pressure on particular areas.
4.3 A key concern is the suitability of dispersal locations. While some areas have established strong support networks, others - particularly new or rural dispersal locations - lack the necessary infrastructure, legal advice services, and community support to meet asylum seekers' needs. Many asylum seekers are placed in physically isolated accommodation, including hotels on town outskirts and former military barracks, which exacerbates exclusion, limits access to legal and health services, and heightens risks of exploitation.
4.4 The use of hotels and large sites as contingency accommodation has also heightened community tensions. Some areas have seen far-right activity and local opposition to new asylum placements, further complicating efforts to foster social cohesion.
5.1 The Home Office has been criticised for not meaningfully engaging with local authorities about asylum accommodation placements (Local Government Lawyer 2023). While local authorities are expected to accommodate asylum seekers under mandatory dispersal, they have limited influence over where and how placements are made.
5.2 The consultations process between local authorities and accommodation providers regarding the location of asylum accommodation is inconsistent and often ineffective. Providers are required to consult councils before procuring a property to ensure it doesn’t negatively impact community plans or local developments. Where there are disagreements, these can be referred to the Home Office, which makes the final decision. Concerns have been raised about the lack of independence in this system, with decisions being made without a clear rationale, a named deciding officer or a formal route for appeal. There is also no nationally agreed protocol for managing these objections, creating regional inconsistencies and frustration among local authorities.
6.1 For those granted refugee status, the transition out of the asylum system remains a major point of vulnerability, with many at high risk of homelessness and destitution. Until recently, individuals were given just 28 days to vacate their asylum accommodation after receiving their biometric residence permit (BRP). This period was widely reported to be insufficient for securing employment, navigating welfare applications, or finding alternative housing, particularly given the five-week wait for Universal Credit payments.
6.2 The efforts of the last government to clear the asylum backlog and reduce reliance on hotels led to a surge in new refugee status grants, placing significant strain on local authority homelessness services (NACCOM 2024). Instead of experiencing a moment of relief, many newly recognised refugees faced immediate housing insecurity, exacerbating financial hardship and integration challenges.
6.3 In our report, we recommended extending the move-on period to 56 days - a measure that has now been introduced on a trial basis. We welcome this development and look forward to evaluating its impact to ensure that refugees are given the time and support needed to secure stable housing and avoid destitution.
7.1 The top-down nature of dispersal and accommodation placements, combined with short notice for local authorities and inadequate funding, has exacerbated existing challenges in housing, healthcare, and community cohesion.
7.2 A key issue is the impact on housing shortages and homelessness services. Local authorities, already struggling with a lack of affordable housing, have faced increased demand for emergency accommodation (NACCOM 2024). Without sufficient lead-in time or resources to expand local housing provision, councils are often left reacting to crises rather than planning effectively.
7.3 Similarly, access to healthcare, including mental health support, has been poorly integrated into the asylum accommodation system. People seeking asylum - many of whom have experienced significant trauma - are often placed in locations where services are already stretched. We heard through our research that limited coordination between the Home Office and local NHS providers has resulted in patchy mental health provision, with asylum seekers facing long waits or struggling to access care altogether.
7.4 Finally, the use of hotels and barracks as contingency accommodation without local engagement or proper planning has contributed to tensions in some communities, which in turn have been exploited by far-right groups. Local authorities and civil society organisations have repeatedly raised concerns that placing people in large, isolated sites without adequate local consultation undermines cohesion efforts. A more strategic, locally informed approach—where councils are involved in placement decisions and provided with the resources to support asylum accommodation—would help mitigate these challenges and ensure better outcomes for both asylum seekers and local communities.
8.1 The current asylum accommodation system is failing, creating high costs for asylum seekers, local communities, and both central and local government. A reliance on contingency accommodation and weak oversight have led to rising expenses, worsening living conditions, and increasing tensions in dispersal areas. Without reform, these pressures will continue to escalate.
8.2 In our recent report, we set out a vision for a decentralised, locally led approach to asylum accommodation—one that would improve efficiency, reduce costs, and enhance community cohesion. To achieve this, we recommend:
8.3 Decentralising asylum accommodation to improve effectiveness
8.3.1 A decentralised approach would transfer responsibility for managing asylum accommodation to regional bodies, such as Strategic Migration Partnerships, strategic authorities, local authority consortia, or devolved governments, enabling a more strategic and responsive system than the current centralised system allows.
8.3.2 Local and regional authorities have a strong interest in reducing reliance on hotels due to the strain they place on community cohesion. Giving these authorities control would allow for more effective coordination of housing, service provision and integration efforts. Regional coordination, among local authorities, housing associations, and civil society organisations would develop cost-effective, community-based solutions.
8.3.3 Under this model - and given their national coverage - SMPs would negotiate initial regional asylum deals directly with the Home Office, negotiating on funding and the delivery of provision. The responsibility for managing asylum accommodation could be taken on by SMPs, strategic authorities, devolved governments or local authority consortia, depending on regional preference and capacity. These bodies would then have flexibility to subcontract accommodation and services to a mix of providers, including local authorities, housing associations, charities, and private providers, ensuring higher standards and better value for money.
8.3.4 A phased rollout should begin with the establishment of 'pathfinder' regions to test and refine the decentralisation model. This should, at a minimum, leverage the 2026 break clause in existing contracts or pilot earlier initiatives if feasible, allowing adjustments ahead of a full national rollout in 2029, when the current national contracts are set to end.
8.4 Investing in a capital subsidy programme to expand housing supply
8.4.1 A critical bottleneck in the asylum accommodation system is the lack of available temporary housing stock. This shortage exacerbates delays in moving people seeking asylum from initial or contingency accommodation into more stable dispersal housing. Addressing this bottleneck requires a broader strategy to improve the supply and quality of temporary housing, benefiting not only asylum seekers but also other vulnerable groups.
8.4.2 According to Wareing and Eckley (2024) moving from a revenue to a capital subsidy model could significantly expand the availability of affordable asylum accommodation, and in the long-run grow the general social housing stock. Based on a capital fund of £1.75bn, local authorities (or housing associations) could buy and renovate between 14,000 and 16,000 homes, which they would then let out at Local Housing Allowance rates. The modelling suggests that the average payback period of the investment compared to using hotels would only be seven months.
8.4.3 The Home Office should consider piloting a capital subsidy model in select regions, aligning its geographical scale with the regional pathfinder approach for decentralising asylum accommodation management. Pairing this with a decentralised model, as outlined above, will ensure that local and regional bodies have the capacity to deliver innovative housing solutions tailored to their communities' needs.
8.5 Other key recommendations
References
House of Commons Library (2023) ‘Asylum accommodation: Hotels, vessels and largescale sites’, research briefing, 23 July. https://researchbriefings.files.parliament.uk/documents/CBP-9831/CBP-9831.pdf
Independent Chief Inspector of Borders and Immigration [ICIBI] (2024) An inspection of contingency accommodation November 2023-June 2024. https://www.gov.uk/government/publications/an-inspection-of-contingency-asylum-accommodation-november-2023-june-2024
Local Government Lawyer (2023) ‘LGA Conference: calls for improved communication between Home Office and councils over asylum seekers’, article, 7 July. https://www.localgovernmentlawyer.co.uk/governance/396-governance-news/54378-lga-conference-calls-for-improved-communication-between-home-office-and-councils-over-asylum-seekers
Mort L and Morris M (2024) Transforming asylum accommodation, IPPR. http://www.ippr.org/articles/transforming-asylum-accommodation
National Audit Office [NAO] (2024) Investigation into asylum accommodation. https://www.nao.org.uk/wp-content/uploads/2024/03/investigation-into-asylumaccommodation.pdf
No Accommodation Network [NACCOM] (2024) ‘Evictions into homelessness: The ongoing “move-on” emergency facing people leaving the asylum system’, blog post, 4 April. https://naccom.org.uk/blog-evictions-into-homelessness-the-ongoing-move-onemergency-facing-people-leaving-the-asylum-system/
Wareing K and Eckley B (2024) An alternative model for funding asylum and temporary housing: Building a more cost effective and humane system. https://www.soha.co.uk/wp-content/uploads/2024/10/An-alternative-model-for-funding-asylum-and-temporary-housing.pdf
Feb 2025
[1] Our research included two policy workshops with experts from various sectors with knowledge of the asylum accommodation system, including refugee and migrant charities, housing associations, combined authorities, strategic migration partnerships and academia. Discussions focused on policy responses to three key issues: the quality and standards of accommodation; the health and wellbeing of accommodated people seeking asylum; and their support and integration needs. A third workshop was held with staff at the British Red Cross working in institutional accommodation settings across the UK. These were complemented by more than 20 conversations with people from the aforementioned sectors, as well as local authorities, civil servants and private providers. We partnered with The VOICES Network and Bloody Good Period to deliver three listening sessions with around 30 people with lived experience of asylum accommodation. Conversations focused on the quality of accommodation, its impact on health and wellbeing, the support received while accommodated, and ideas for policy and practice changes.
[2] The ICIBI (2024) report ‘An inspection of contingency accommodation’ indicates that the costs of hotel accommodation fluctuate – in the three months to June 2023, these stood at £158 compared to “around £20” per night for dispersal accommodation. https://www.gov.uk/government/publications/an-inspection-of-contingency-asylum-accommodation-november-2023-june-2024
[3] 2019/20 cost adjusted to 2023/24 prices.
[4] See: https://www.bailii.org/ew/cases/EWHC/Admin/2024/579.html
[5] See: https://www.unhcr.org/uk/media/unhcr-idc-vulnerability-screening-tool-identifying-and-addressingvulnerability-tool-asylum