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Foreign aid watchdog says Government’s approach to asylum is ‘untenable’ as new backlog of cases left in limbo is building up fast


Independent Commission for Aid Impact publishes follow-up report on foreign aid spending on asylum seekers and refugees in UK

Date of Publication:

The Independent Commission for Aid Impact (ICAI), which is the official public watchdog scrutinising UK aid spending, said yesterday that the Government's approach to asylum following the enactment of the Illegal Migration Act 2023 is untenable both from a humanitarian perspective and from a financial one. It warned that a new backlog of cases of asylum seekers left in limbo is building up fast.

Immigration stampImage credit: UK GovernmentThe comments came in the ICAI's follow-up report to last year's review of aid spending on refugees in the UK, known as 'in-donor refugee costs'.

In last year's report, the ICAI found that almost a third of the UK's overseas aid budget was now being spent on asylum seekers and refugees in the UK, with most of it used to pay for hotel accommodation. Under international aid rules established by the Organisation for Economic Cooperation and Development (OECD), in-donor refugee costs can be counted as official development assistance (ODA), defined as government aid to promote the economic development and welfare of developing countries.

Yesterday's follow-up report by the ICAI finds that little has changed. In-donor refugee costs constituted 28% of all UK aid spending last year. You can read the ICAI's new report online here or download it here.

The ICAI stated: "Returning to the topic a year later, ICAI's follow-up shows that, far from reducing as costs of Ukrainian and Afghan refugee schemes went down, in-donor refugee costs have continued to increase, from £3.7 billion in 2022 to £4.3 billion in 2023. Again, hotel costs are the main drivers of the increase, but other categories of spend, both by the Home Office and by other departments, also remain very high. Despite various Home Office initiatives to move away from hotel accommodation, almost exactly the same number of asylum seekers were accommodated in hotels in December 2023 as in December 2022 (more than 45,700 people), although the Home Office reported a drop in the first quarter of 2024. Value for money concerns have not diminished: the per person per night costs are fluctuating but have not reduced, while standards of support do not seem to have tangibly improved."

As the ICAI noted, a recent investigation by the National Audit Office (NAO) found that the Home Office expected to spend around £3.1 billion on hotels in the financial year 2023-24, up from £2.3 billion in 2022-23.

The ICAI says the biggest uncertainty regarding how large the Home Office's in-donor refugee costs will be in the future is the Illegal Migration Act (IMA) and when, or if, it will be fully enacted. This uncertainty also means that asylum seekers are being left in an 'untenable' state of limbo since the IMA became law.

The report states: "[T]he current situation for the cohorts of asylum seekers who arrived by irregular routes (and therefore would fall under the IMA) after 8 March 2023, when the Illegal Migration Bill was introduced to Parliament, and after 20 July 2023, when it received royal assent and became an Act, is full of contradictions. The Home Office has allowed this cohort of arrivals to enter the asylum claims system and is reporting their accommodation costs as ODA, but it is not progressing their applications as it is assumed that they will be deported. This approach is untenable as a new backlog of cases in limbo is building up fast, at considerable human and financial cost."

The report explains further:

1.19 For now, the Secretary of State’s duty to make arrangements to remove people who fall under the IMA is not in force. The status of the cohort of asylum seekers who have arrived after 20 July 2023 by irregular routes (and therefore would fall under the IMA) is not entirely clear. The situation is also unclear for those who arrived between 8 March 2023, when the Illegal Migration Bill was introduced to Parliament, and 20 July 2023, when it received royal assent and became an Act. They are hosted within the existing asylum accommodation and support system (mainly hotels) and, for now, the Home Office considers its accommodation and support costs for this group of asylum seekers to be eligible as in-donor refugee costs. If the IMA is fully enacted, this would change and the UK's in-donor refugee costs would drop dramatically. If detention facilities are used before an asylum seeker is removed, this type of accommodation would not be ODA-eligible. But even if not detained, if the IMA were to be fully in force, those who fall under its provisions would be barred by law from receiving protection in the UK. Accommodation and support for this group would then no longer be ODA-eligible as it is not protection-related.

1.20 There is already ambiguity around this question from the Home Office, in that the Home Office has allowed asylum seekers arriving by irregular means after 20 July 2023 to enter the asylum claims system but is not progressing their applications. In ICAI's view, this limbo state is untenable both from a humanitarian perspective and from a financial one:

Humanitarian imperative: Leaving people for months and potentially years living with profound uncertainty about their future, most of whom (according to previous Home Office asylum statistics) [1] would end up receiving refugee status in the UK if their claims were to be processed, is not in line with humanitarian principles. If the IMA is not fully in force, asylum applications should be processed within a reasonable timeframe, not left until an unknown future date at which time the Act may become enforced.

Financial imperative: A new backlog of arrivals after the IMA was brought as a bill before Parliament in March 2023 has been building up fast. More than 55,000 people arrived in the UK and entered the asylum claims system between March and December 2023. [2] Most arrived irregularly, meaning that their applications are in limbo due to the IMA. Most of these people have also entered the asylum accommodation system while waiting indefinitely, staying mainly in costly hotel accommodation, which is funded by ODA for the first 12 months. The decision to leave this growing number of asylum seekers in limbo thus has a considerable financial cost, which is increasing by the day.


[1] Grant rates fluctuate, and vary by nationality, but have been high since 2021. In the year ending December 2023, two-thirds of initial asylum decisions granted "refugee status, humanitarian protection or alternative forms of leave" to asylum applicants. See National statistics: How many people do we grant protection to?, published 29 February 2024, paragraph 6.2, link.

[2] Press release – Response to the government's latest statistics on the asylum backlog, British Red Cross, 29 February 2024, link.

Meanwhile, the Home Office announced yesterday that it was making "rapid progress" in closing asylum hotels and returning them to their original community use. Following the initial closure of 100 hotels completed last month, a further 50 will be closed by the end of May. "This means there are 20,000 fewer asylum seekers in hotels than 6 months ago, down from more than 56,000 at the end of September 2023 – a reduction of 36%," the Home Office said.