Billions of taxpayer money 'wasted on chaotic asylum hotel system' as litany of failures exposed

The review concluded there was a "manifest failure" by the Home Office to "get a grip" of contracts made with the private firms tasked with housing asylum seekers.

The companies were able to make "excessive profits" from the ongoing migrant crisis as a result.

MPs said the Home Office had a "chaotic" response to ongoing pressures because it repeatedly cut corners and failed to give long-term solutions.

The report added: "The Home Office has undoubtedly been operating in an extremely challenging environment but its chaotic response has demonstrated that it has not been up to the challenge."

The expected cost of housing asylum seekers from 2019 to 2029 using the current accommodation contracts has more than tripled from £4.5billion to £15.3billion.

A "dramatic increase" in demand due to the rising number of those arriving in small boats is among the reasons for this heightened cost.

Asylum hotels were put in the spotlight this summer after multiple demonstrations took place across the country, particularly in Epping, to protest against them.

The Home Affairs Committee said it was "inexplicable" that accommodation providers were not required to assess the impact migrants hotels would have on local areas before they opened.

As a result, "some local services experienced unsustainable pressures" and community cohesion was damaged as "misinformation and mistrust" were allowed to grow.

MPs acknowledged that the majority of the protests involved local residents with "genuine concerns".

Dame Karen Bradley, chairwoman of the committee, said: "The Government needs to get a grip on the asylum accommodation system in order to bring costs down and hold providers to account for poor performance."

She added: "The Home Office has presided over a failing asylum accommodation system that has cost taxpayers billions of pounds.

"Urgent action is needed to lower the cost of asylum accommodation and address the concerns of local communities."

The Government's neglect of the day-to-day handling of the contracts was also highlighted in the report, especially regarding financial management.

Excess profits from providers totalling tens of millions of pounds which are owed to the Home Office have not yet been reclaimed by the department.

The committee said this money should be being used on public services, "not sitting in the bank accounts of private businesses".

A spokesman for the Home Office said: "The Government is furious about the number of illegal migrant in this country and in hotels.

"That is why we will close every single asylum hotel - saving the taxpayer billions of pounds.

"We have already taken action - closing hotels, slashing asylum costs by nearly £1billion and exploring the use of military bases and disused properties."