Hotels were £46m cheaper than migrant barges and barracks

Housing migrants on barges and former military bases is costing the taxpayer tens of millions of pounds more than if they had remained in hotels, parliament’s spending watchdog has found.

Despite pledging to cut costs, the Home Office is spending £46 million more to house migrants in the Bibby Stockholm barge, two former RAF bases and former student accommodation than it would cost if they were in hotels.

The plan unveiled in December 2022 by Rishi Sunak aimed to reduce the £8 million a day cost of asylum hotels by transferring migrants to larger sites including the barge in Portland, Dorset, RAF Wethersfield in Essex, RAF Scampton in Lincolnshire and student accommodation in Huddersfield.

But the NAO said the bill ballooned because the Home Office underestimated the refurbishment and set up costs, which were up to 10 times higher than anticipated.

Officials calculated it would take £5 million each to convert the RAF bases into asylum camps but ended up spending £49 million on Wethersfield and £27 million on Scampton.

The sites were also less than half full. Not a single asylum seeker has yet moved into RAF Scampton or Huddersfield which have yet to open nearly a year after being identified.

By the end of January, RAF Wethersfield only had 576 migrants when the Home Office had projected 1,445, while the Bibby Stockholm only had 321 migrants against a projected total of 430.

At least £3.4 million was also wasted trying to develop other sites including vessels, former military bases, holiday camps, hard-sided tents and converted office buildings.

Meg Hillier, chair of the public accounts committee, said: “Today’s National Audit Office report shows that instead of saving taxpayers’ money by accommodating people seeking asylum at large sites, the Home Office will actually spend £46 million more than if it uses hotels.

“The Home Office did not understand the challenges it faced in setting up large sites and moved too quickly, incurring losses, increasing risks and upsetting local communities.

“And the sites are housing fewer people than planned.”

The Home Office is expecting to spend at least £230 million on developing the four sites by the end of March with the entire “large sites” plan expected to cost £1.2 billion.

This is despite the scheme having been rated as “red” by its own internal reviews and the Infrastructure and Projects Authority. “Red” flagged means that the “successful delivery of the programme to time, cost and quality appears to be unachievable”.

The National Audit Office said the department had put the speed of awarding contracts ahead of getting value for money with “fully-competitive tenders” which meant they had “overly ambitious” timetables and “increased procurement risks”.

Local councils and residents were kept in the dark as the Home Office secured some large sites using emergency planning rules before telling local “stakeholders” about its plans “to reduce the risk of local opposition affecting its negotiations”.

The Home Office is “resetting” its programme by reducing the number of spaces it intends to provide at such sites and identifying smaller locations for 200 to 700 migrants, said the NAO. Scampton’s capacity is being reduced from 2,000 migrants to 800 and RAF Wethersfield is expected to be capped at a similar number.

The NAO said there were “uncertainties” about how the Illegal Migration Act was being implemented, making it harder for the Home Office to assess what asylum accommodation it needed.

The report said the law changes would make it “more difficult to assess how much and what type of accommodation the Home Office will need” as it does not know how effective the deterrent will be or how it will affect the amount and type of accommodation it needs.

Priti Patel, a former home secretary who campaigned against Wethersfield in her neighbouring constituency, criticised “poor planning and a failure to get a grip” which had led to irresponsible public spending with costs spiralling out of control.

A source close to James Cleverly, the Home Secretary, said: “Any government is under a statutory obligation to house asylum seekers. At a time of unprecedented global migration the Government created large sites to fulfil this obligation and move away from the £8 million a day cost of hotel use.

“We have been clear these costs are too high and have answered the question Labour cannot, of where you can house asylum seekers when it is not possible to return them to their home country.”