New council homes will be built for asylum seekers as part of a scheme designed to reduce the “scandalous” use of hotels and private landlords as temporary accommodation.
Around 200 local authorities want to take part in a Government pilot project that gives them money to build new housing or refurbish derelict properties for asylum seekers.
Some council bosses are keen on “renationalising” asylum accommodation, hoping the Home Office’s controversial private contractors can be stripped of responsibility. They also welcome the prospect of adding more properties to their portfolio.
However, some critics fear the plan could backfire and spark “outrage” among taxpayers who will want any extra money spent on social housing for local residents.
Last year, more than 1.3 million households were on social housing waiting lists across England – a 3 per cent increase on 2023 and the highest number since 2014. Meanwhile, the Home Office is currently responsible for accommodating around 100,000 asylum seekers.
The Government pilot would aim to allow councils to buy more properties – including in new housing developments where homes are failing to sell – to boost their social housing stock and reduce the reliance on private contractors.
Initially, properties would be leased to the Home Office, but could later revert to social housing, with the aim of saving local authorities money in the long run.
It follows waves of anti-migrant protests outside hotels over the past two years, with Labour promising to stop placing asylum seekers in these sites by 2029.
The Home Office’s asylum accommodation contractors – Serco, Clearsprings and Mears – are trying to reduce their use of hotels and get private landlords with homes in multiple occupation (HMOs) to take on a bigger role.
The councils that want to house asylum seekers
Hackney: The Labour-controlled London borough confirmed it had expressed interest in the Home Office asylum dispersal pilot.
Brighton & Hove: The Labour-held city council already has experience buying and refurbishing empty, privately owned properties for social housing.
Thanet: The Labour-run district council in Kent is keen to add to its housing portfolio, as well as improving accommodation for asylum seekers.
Peterborough: The city council in Cambridgeshire, also controlled by Labour, said it had expressed interest in taking part in the asylum housing scheme.
Powys: The county council in west Wales, a Labour-Liberal Democrat coalition, said the scheme would help councils “shape the future design of asylum dispersal”.
Critics claim that leasing HMO flats from landlords risks heightening “tinderbox” tensions within communities, as well as reducing the supply of available properties to renters on low incomes.
Some councillors fear the pilot scheme could cause similar issues if it is seen to be “prioritising people who arrived here on small boats over those born and bred in the community”.
Councils could help end ‘inefficient’ system
Labour ministers have turned to former military sites to ease the crisis, with plans to reopen two former barracks in East Sussex and the Scottish Highlands. Both sites will house a total of 900 people.
However, official figures show that there are still 36,000 asylum seekers in hotels and about 71,000 in “dispersal” accommodation in the private rented sector – far too many people to be housed in derelict barracks.
Local authorities are now wanting to take on some of the job and a £100m fund has been set aside to either build new housing or restore empty properties. Figures linked to the scheme suggest the funding would be enough to build around 900 new homes.
Almost 200 councils have expressed an interest in the asylum dispersal pilot, it is understood. Five have confirmed to The i Paper that they are keen to take part: Brighton and Hove, Hackney, Peterborough, Thanet, and Powys.
Bella Sankey, leader of Labour-run Brighton and Hove City Council, told The i Paper she hoped the scheme could be the start of a systematic overhaul in asylum housing. She said the current system was “inefficient” in allowing taxpayers’ money to be “creamed off for handsome profits by private companies”.
Sankey believes councils could offer new arrivals better support, since they already run adult social care, education and have strong connections to the charity sector.
In the longer term – if the asylum backlog can be brought down – councils could use the new or refurbished properties for social housing, she claimed.
“Owning more of our own housing, housing that can be used much more flexibly in future, would be a win-win,” said Sankey. “It would be far better to invest in local authorities to build or buy stock, rather than money going out of the door to private contractors, private landlords, to hotels.
“I think that over time this could replace entirely the need for private contractors to have any role in the system. Each local authority could be asked to step up and do their bit.”
Billions drained by ‘chaotic’ private system
The Home Office has already spent billions of pounds on “chaotic and expensive” asylum accommodation, according to a scathing report by the Home Affairs Committee in October.
The cost of the contracts handed to Serco, Clearsprings and Mears between 2019 and 2029, to lease hotels and landlords’ homes, has tripled from £4.5bn to £15.3bn.
A recent report by The i Paper found that asylum seekers were stuck in “squalid” conditions inside hotels – facing overcrowding, bad food, mice, rats and mould.
Helen Whitehead, deputy leader of Labour-run Thanet District Council, said her local authority wanted to take part in the pilot scheme because the current system “provides poor-quality accommodation at great financial cost”.
She added: “We welcome the potential to provide more safe and suitable temporary housing and to add to our council portfolio in doing so.”
Fear of competition for scarce housing
However, in other areas there have been concerns about the idea. Chris Read, the Labour leader of Rotherham Council, is sceptical of the prospect of “renationalising” asylum accommodation.
He fears that anti-asylum anger – currently aimed at hotel owners and firms like Serco – could be redirected towards local leaders. An asylum hotel in Rotherham was targeted in riots last summer, with one man who tried to set fire to the place jailed.
Read also argued that he would be expected to spend any extra housing funding on social housing for residents, with around 4,000 people on Rotherham’s waiting list.
“I would be concerned about any system seen to set up a direct competition between local residents and asylum seekers,” said the Labour council boss. “Local residents would feel there were people coming from out of the area competing for a scarce resource.”
George Madgwick – a Reform UK councillor in Portsmouth who has campaigned against asylum seekers being placed in HMO flats in his area – also thinks it is a bad idea. “It’s uncomfortable territory if councils were prioritising the needs of people who arrived here on small boats over those born and bred in the community,” he said.
Some Labour MPs gave a cautious welcome to the scheme. Bell Ribeiro-Addy, who represents Clapham and Brixton Hill, said councils were “the most obvious choice” for asylum housing.
The left-wing MP said she hoped it could put an end to “the disgusting and wasteful profiteering” by private firms running the system.
Jonathan Brash, Labour MP for Hartlepool, said he would support the shift to local authorities – but only if it led to more even distribution of asylum seekers across the country.
“Red Wall” Labour MPs are unhappy that the north of England and Midlands have taken more than their fair share because private contractors are attracted to the cheaper housing in those areas.
“Deprived areas should no longer carry the heaviest burden, and towns like Hartlepool must not be treated as a default solution,” said Brash.
Empty homes refurb could end ‘scandal’
Kate Wareing, chief executive of Soha Housing Association in Oxfordshire, said she hoped the council pilot scheme is just the start. She is keen for housing associations to take part in a wider asylum housing overhaul.
Investing £1.75bn could allow social housing providers to buy or renovate between 14,000 and 16,000 homes, according to a report Wareing co-authored last year.
Chris Bailey of Action on Empty Housing said he thought that fixing up at least some of England’s 300,000 long-term, decaying empty homes for asylum seekers could address two problems at once.
He said it was “scandalous” that “we’re spending billions of pounds on rubbish housing, through these [private] asylum contracts, when we could be spending on it creating better quality housing”.
Tim Naor Hilton, chief executive of Refugee Action, said locally run housing offered a more “humane, accountable and value-for-money model”.
Ash Zuberi, who runs the HMO Group, a network of property owners, believes private landlords still have an important role to play. He said the Home Office could cut out the big contractors and deal directly with landlords that specialise in managing asylum seekers.
Your next read
“These big players [Serco, Mears, Clearsprings], they’re just too big,” he said. “They have poor standards, they just don’t care. If you opened [the contracts] up to small players that did care, you might get a better result.”
The Home Office vowed again to “close every asylum hotel” and said it was “working closely with local authorities” to look at more suitable accommodation.
Serco and Clearsprings declined to comment. A spokesperson for Mears said it was able to “deliver value for money” and would “continue to offer support” as the asylum model changed in future. All accommodation used was approved and inspected by the Home Office, it added.
