Keir Starmer faces plea to stop wasting money on asylum hotels using aid cash

More than 100 refugee charities have called on Keir Starmer to stop putting asylum seekers in hotels.

They warn that because the money to pay for accommodation comes from the aid budget - which is being drastically cut - vital humanitarian work around the will be lost. The charities, including Refugee Council, Refugee Action, Save the Children UK and the International Rescue Committee UK, say the Home Office must foot the bill.

In 2024, the UK spent around £2.8billion of UK aid funds on costs associated with housing asylum seekers - around 20% of its budget. Mr Starmer has slashed overseas aid by around £6billion a year to fund a hike in defence spending.

Imran Hussain, from the Refugee Council - one of 107 organisations to sign the call - said: “It is vitally important overseas aid is used as it was always supposed to be used - to support people in need around the world. This is fundamental for making the world a safer, more secure place."

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He continued: "Poor policy decisions and mismanagement of the asylum system have led to costs spiralling. The most effective way to take costs out of the system is by working quickly and fairly to determine who is a refugee and who has no right to stay here.

"Get that right, and the accommodation costs will fall.” The organisations called for asylum seekers to be housed in communities while their applications are processed. They warned that failing to invest in overseas development will impact on the number of people displaced by poverty, climate change and conflict.

Their letter called on the PM to trigger the break clauses in ten-year contracts signed in 2019 worth around £4.6 billion with three private contractors. These firms are responsible for finding asylum accommodation.

MP Sarah Champion, who chairs the Select Committee for International Development, said: “Of course, we have a duty to support refugees and asylum seekers but using the UK aid budget to fund overpriced hotels is completely the wrong approach. These expensive and inappropriate hotel contracts funded by the taxpayer must end.

We urgently need a fair and humane asylum system at home that doesn’t come at the cost of abandoning those already facing hardship globally.”

A government spokesman said: “We are delivering on our pledge to close asylum hotels, which will drastically reduce taxpayer costs and give control back to local communities.

“Under the previous government, the development budget was redirected towards the asylum backlog, which is now being tackled at record pace to redirect our focus on international priorities overseas. We have increased asylum decision-making by 52% in the last three months of 2024, and since the election, have removed more than 24,000 people with no right to be here.”

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