New report by independent watchdog says £3.5 billion spent in UK last year, leading to loss of efficiency and equity of UK aid
A report published yesterday by the Independent Commission for Aid Impact (ICAI) looks at how the UK is spending money from the overseas aid budget — known as official development assistance (ODA) — on refugees and asylum seekers within the UK.
Image credit: UK GovernmentThe 44-page report can be read online here or downloaded as a PDF file here.
ICAI is an independent watchdog that scrutinises UK aid spending.
According to the report, approximately one third of the UK's total overseas aid budget is now being spent in the UK on supporting refugees and asylum seekers.
As ICAI notes, the first year of some of the costs associated with supporting refugees and asylum seekers who arrive in a country qualifies as ODA under international aid rules. Though ICAI further notes that this category of aid, known as 'in-donor refugee costs', has always been controversial.
ICAI estimates that UK expenditure on in-donor refugee costs was around £3.5 billion in 2022.
The report explains: "There are a number of reasons for the increase in UK aid spent on in-donor refugee costs, including the large visa schemes established for Afghan and Ukrainian refugees, increasing numbers of asylum seekers crossing the Channel, and a growing backlog in asylum claims processing. Due to a shortage of accommodation, the Home Office has housed refugees and asylum seekers in hotels, at a reported cost of £6.8 million per day in October 2022."
As a result, UK aid resources are being diverted away from emergency response overseas, meaning the ODA budget is helping far fewer people. ICAI calls it a significant loss in the efficiency and equity of UK humanitarian aid.
Much of the ODA budget being spent in the UK goes towards paying for hotel accommodation.
Earlier this month, the House of Commons International Development Committee also reported on the issue. The 15-page report, available here, noted: "In the most recent three years for which data are available, UK aid spending per refugee in the UK almost tripled, increasing from £6,700 per capita in 2019 to £21,700 per capita in 2021. That level of per capita spending exceeded any other OECD Development Assistance Committee (DAC) country during 2018–21. It is around three times the DAC average of £7,400. The increase in per capita costs is likely to have been caused by the cost of housing asylum seekers in hotels. … The recent trebling of per capita costs on supporting refugees in the UK represents unwarranted largesse by the Home Office at the expense of both UK taxpayers and people living in the world's poorest countries."
ICAI warns that the UK's approach to in-donor refugee costs creates little incentive for the Home Office and other departments to control their expenditure in this area, with one stakeholder saying the use of the aid budget effectively gave the Home Office a blank cheque.
The report highlights: "The Home Office engages private contractors to provide accommodation and services for asylum seekers. ICAI assessed how these high-value contracts were managed and found that the Home Office did not effectively oversee the value for money of the services. It has recently developed trackers to monitor and compare the cost effectiveness of different suppliers, but the key performance indicators (KPIs) that are being monitored are, overall, not appropriate for the task of ensuring that the right outcomes are being reached and that value for money is achieved. Without appropriate performance data and baselines, the Home Office's ability to manage its suppliers in such a way as to encourage continuous improvement is limited."
ICAI's chief commissioner, Dr Tamsyn Barton, said: "We were informed in March 2022 by the Home Office that costs amounted to £120 per person per night (including catering and other services), compared to £18 for longer-term accommodation in houses and flats. Earlier this month, the Home Office provided a list of improvements they are currently making in managing the asylum contracts and sourcing accommodation; however, ICAI did not see evidence to verify this information or assess how these improvements are being implemented."
On the day of the release of the ICAI report, immigration minister Robert Jenrick made a statement to the House of Commons announcing that the Home Office will now be accommodating asylum seekers on surplus military sites.
Jenrick said: "The sheer number of small boat arrivals has overwhelmed our asylum system and forced the Government to place asylum seekers in hotels. … [F]aced with the scale of the challenge, we must fundamentally alter our posture towards those who enter our country illegally. This Government remain committed to meeting our legal obligations to those who would otherwise be destitute, but we are not prepared to go further. Accommodation for migrants should meet their essential living needs and nothing more, because we cannot risk becoming a magnet for the millions of people who are displaced and seeking better economic prospects."
He continued: "I have said before that we have to suffuse our entire system with deterrence, and this must include how we house illegal migrants. So today the Government are announcing the first tranche of sites we will set up to provide basic accommodation at scale. The Government will use military sites being disposed of in Essex and Lincolnshire and a separate site in East Sussex. These will be scaled up over the coming months and will collectively provide accommodation to several thousand asylum seekers through repurposed barrack blocks and portakabins. In addition, my right hon. Friend the Prime Minister is showing leadership on this issue by bringing forward proposals to provide accommodation at the Catterick garrison barracks in his constituency. We also continue to explore the possibility of accommodating migrants in vessels, as they are in Scotland and in the Netherlands."
Yvette Cooper, Labour's shadow Home Secretary, said in response that the immigration minister's statement amounted to an admission of failure.
Cooper told the Commons: "[W]e need to end costly and inappropriate hotel use, but these plans do not do that. The Minister has had to admit that, contrary to all the briefing in the papers this morning, they will not end hotel use—instead, these sites are additional. Ministers should have been finding cheaper sites and properly managing costs years ago."
Highlighting the publication of the ICAI's report, Cooper added: "Today's damning report from the Government's own independent watchdog, which strangely the Minister did not mention today, says that there has been no cost control; that the Home Office contracts are highly inefficient; that there is no cross-Government transparency and oversight; and that officials did not have financial information on the contracts they were signing and did not compare costs. Most ludicrously of all, it says that 'different parts of the Home Office operating different schemes…at times, found themselves competing for the same hotel contracts, driving prices up'. This is totally chaotic."
A Home Office press release here provides more details on the new accommodation plans and says the Government will:
- set up accommodation sites on surplus military sites in Wethersfield and Scampton for up to 3,700 asylum seekers across both sites, while preserving their heritage
- open a non-military site in Bexhill, East Sussex which will also be used for accommodation for up to 1,200 people
- explore the use of vessels to provide accommodation in line with the approach taken by the Netherlands and Scotland
- significantly increase dispersed accommodation across the country by providing a new local authority funding package with a generous additional per bed payment for asylum seekers, alongside continued funding for each new dispersal bed
- pilot an extra incentive payment for local authorities when properties for asylum seekers are made available faster
- introduce a temporary licensing exemption to houses of multiple occupancy regulations for asylum seekers which will help move people out of hotels more quickly
Robert Jenrick was quoted as saying: "The Home Secretary and I have been clear that using expensive hotels for asylum seekers is wholly unacceptable. Delivering accommodation on surplus military sites will provide cheaper and more orderly, suitable accommodation for those arriving in small boats."
Deighton Pierce Glynn (DPG) solicitors said it has been instructed to advise in relation to a potential legal challenge by a local resident over the proposal to use the ex-RAF site in Wethersfield, Essex as asylum accommodation.
DPG said: "Government inspectors, parliamentarians, health experts and many others have highlighted the harmful effects of housing asylum seekers in military barracks. Asylum seekers should not be segregated or subject to isolated, military style accommodation in an unsafe location. Our client is therefore seeking to challenge the Home Secretary's purported attempt to circumvent planning laws using emergency powers to establish unsuitable accommodation for asylum-seekers without consulting local people and the local planning authority."