HM Treasury's spending review sets out savings of £1 billion per year by reducing asylum support costs
In today's Government spending review, the Chancellor announced increased investment in border security and an overall reduction in spending on the asylum system.
Image credit: Wikipedia The measures include up to £280 million extra per year by the end of the current Parliament to support the new Border Security Command, tasked with disrupting the criminal gangs behind the Channel boat crossings.
As part of a broader cost-cutting initiative, the Chancellor revealed plans to phase out the use of hotels for housing asylum seekers by 2029, a move intended to reduce long-term spending on asylum support.
The Chancellor told Parliament: "I can confirm today that, led by the work of my right hon. Friend the Home Secretary, we will be ending the costly use of hotels to house asylum seekers in this Parliament. Funding that I have provided today, including from the transformation fund, will cut the asylum backlog; allow more appeal cases to be heard; and return people who have no right to be here, saving the taxpayer £1 billion per year."
The spending review states:
Asylum and border security
2.17 The government is committed to ensuring the border is secure and the UK has a properly functioning asylum system. This includes increasing funding for border security to ensure that the UK's rules are respected and enforced.
2.18 The government will provide up to £280 million additional [resource departmental expenditure limits] per year by 2028-29 for the Border Security Command to tackle the people-smuggling gangs running small boats.
2.19 The [Spending Review] settlement includes £200 million of transformation funding to accelerate the transformation of the asylum system and end the costly use of asylum hotels in this Parliament by clearing the asylum backlog, increasing appeals capacity and continuing to return those with no right to be here. This will deliver the Plan for Change commitment to restore order to the asylum system.
2.20 These reforms will deliver a more affordable and sustainable asylum system, meaning that asylum costs will reduce by at least £1 billion per year by 2028-29 compared with 2024-25.
While the Home Office's overall budget is set to reduce, the spending review explains that will only be due to the expected fall in asylum costs: "Excluding the reduction in the Home Office's budget that will result from the planned reductions in asylum support costs, the Home Office's total [departmental expenditure limits] grows in real terms."
Additional funding for the Ministry of Justice was also announced, enabling courts and tribunals to expand their capacity to process asylum appeals more efficiently and help reduce the asylum backlog.
In the spending review's section on justice, the Treasury said:
3.28 The settlement provides up to £450 million additional investment per year for the courts system by 2028-29, compared to 2025-26, increasing Crown Court sitting days to record levels. This will help tackle court backlogs and improve court productivity. There will be increased capacity every year to process asylum appeals, to help reduce illegal and irregular migration and bear down on asylum costs.
The Law Society Gazette called it a 'modest' rise in spending. Richard Atkinson, president of the Law Society, said it "gives hope that the justice system is a growing priority for the government."
The Bar Council also reacted positively, with vice chair Kirsty Brimelow KC commenting: "The average real terms increase in Ministry of Justice funding of 3.1% is a welcome recognition by the Government that justice is a key public service."
Jonathan Thomas, Senior Fellow at the Social Market Foundation, expressed scepticism over the cut in asylum support spending, noting that the Treasury's plans were "hostage to fortune". He said in response to the spending review: "The political priority is to 'end the costly use of asylum hotels in this Parliament'. Not by housing asylum claimants elsewhere, but by 'clearing the asylum backlog, increasing appeals capacity and continuing to return those with no right to be here'. All of these things are really hard to do and – assuming the investment in the Border Security Command is not sufficient to stop people arriving irregularly in the UK – hostage to fortune; of who, and how many, continue to arrive in the UK to claim asylum."
Speaking in Parliament, Shadow Chancellor Mel Stride called the Government's spending plans "a fantasy". He said the Home Office budget was being "squandered on asylum costs" and noted that small boat crossings were up by 42% this year compared to the same period last year.