Britain's asylum costs slashed by £400m as incentives for illegal migrants collapse

Oliver Partridge
Thu, 09 Apr 2026 18:31:58 +0000

Labour has announced a reduction of more than £400million in asylum-related expenditure as part of its ongoing efforts to deter irregular migration to the UK.

Provisional figures for 2025 Overseas Development Assistance reveal that in-donor refugee spending within Britain has fallen by £432million, representing a 15 per cent decrease from the previous year.

This marks the lowest level of in-donor refugee costs since 2021, with overall spending now sitting £900million below the peak recorded in 2023.

The savings mark a positive start to a string of wider reforms aimed at restoring control to the immigration system, as announced by Home Secretary Shabana Mahmood.

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The reduction has been driven primarily by the closure of asylum hotels, with fewer than 200 such facilities now operational across the country.

Accommodating a single adult in hotel accommodation costs approximately £53,000 annually, making the shift away from these sites a significant source of savings.

The Home Secretary recently unveiled plans to use cash incentives to further encourage failed asylum seekers to leave Britain, with a pilot scheme offering up to £40,000 to select families.

When compared to the cost of housing them at sites across the UK, cash sums handed to migrants are argued to actually relieve the strain on the taxpayer.

The Home Office has also accelerated the processing of asylum applications, contributing to the overall decrease in expenditure.

Alternative accommodation options, including former military sites offering more basic facilities, are being prioritised as the Government works towards eliminating hotel use entirely by the end of the parliamentary term.

The hotel population has dropped by 45 per cent since its peak under the previous administration.

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Alex Norris, Minister for Border Security and Asylum, said: "This Government is driving asylum costs down, saving nearly £1billion in overall costs last year.

"And we are removing the incentives that draw illegal migrants to Britain in the first place, including by closing every single asylum hotel which have become a burden on local communities.

"We will not stop until order and control to our borders is restored".

The minister's comments accompany what the Home Secretary has described as the most comprehensive asylum reforms in a generation, which include eliminating the obligation to provide housing support to those seeking refuge.

Since the 2024 general election, authorities have removed or deported close to 60,000 individuals who entered the country illegally or committed criminal offences while holding foreign nationality.

This figure represents a 31 per cent increase compared with the equivalent 19-month period beforehand, marking the highest removal rate in a decade.

The processing of asylum applications has simultaneously reached its fastest pace in 25 years, with the number of decisions issued rising by 56 per cent.

Consequently, the backlog of applicants awaiting a determination on their case has been cut by almost half.

Despite the reports of rising removals, critics argue more could be done to prevent illegal migrant entering the UK to begin with.

Recent weeks have seen migrants in droves of more than 300 arrive on the shores of Dover via small boat per day, with the Home Secretary extending the deal with French border authorities, whose stoppage rates have been underwhelming.

Zia Yusuf, Reform UK’s home affairs spokesman, said: "Shameful Tory and Labour Governments have sent millions of pounds to France to ‘stop the boats’, yet 100,000 illegal migrants have arrived on our shores in that time.

"The French are laughing at us. Reform would immediately scrap any deal and demand a full refund from France."