Home Office plans to spend £2.2bn of foreign aid on asylum support this year

The Home Office plans to spend about £2.2 billion of foreign aid to support asylum seekers this financial year, according to new figures.

The amount of overseas development assistance (ODA) budgeted by the Home Office – which is largely used to cover accommodation costs such as hotels for asylum seekers – is slightly less than the £2.3 billion it spent in 2024/25.

International rules allow countries to count first-year costs of supporting refugees as overseas development assistance (ODA).

The figures, first reported by the BBC, were published in recent days on the Home Office website.

The Home Office said it is “urgently taking action to restore order and reduce costs” which will cut the amount spent to support asylum seekers and refugees in the UK.

It also said it was expected to have saved £500 million in asylum support costs in the last financial year, and that this had saved £200 million in ODA which had been passed back to the Treasury.

A total of 32,345 asylum seekers were being housed temporarily in UK hotels at the end of March this year.

This figure is down 15% from the end of December, when the total was 38,079, and 6% lower than the 34,530 at the same point a year earlier.

Asylum seekers and their families are housed in temporary accommodation if they are waiting for the outcome of a claim or an appeal and have been assessed as not being able to support themselves independently.

They are housed in hotels if there is not enough space in accommodation provided by local authorities or other organisations.

Labour has previously said it is “committed to end the use of asylum hotels over time”, adding that under the previous Conservative government at one stage “more than 400 hotels were in use and almost £9 million per day was being spent”.

Jo White, chairwoman of the Red Wall group of Labour MPs, told BBC Radio 4’s Today programme on Saturday: “We need to be looking at things like ECHR article eight. I don’t think anything’s off the table … including looking at new options such as processing abroad.

“So, we have to be open to see how we can move move that backlog as quickly as possible. I’m getting impatient.

“I know my colleagues in parliament are getting impatient and we’re pressing the Government as hard as we can on this.”

A Home Office spokesperson said: “We inherited an asylum system under exceptional pressure and are urgently taking action to restore order and reduce costs.

“This will ultimately reduce the amount of official development assistance spent to support asylum seekers and refugees in the UK.

“We are immediately speeding up decisions and increasing returns so that we can end the use of hotels and save the taxpayer £4 billion by 2026.

“The Rwanda scheme also wasted £700 million to remove just four volunteers – instead, we have surged removals to nearly 30,000 since the election, are giving law enforcement new counter-terror style powers, and increasing intelligence sharing through our Border Security Command to tackle the heart of the issue, vile people-smuggling gangs.”

Published: 07/06/2025 by Radio NewsHub