Home Office asks for emergency £2.6bn after asylum seeker hotels overspend

The Home Office has sought an emergency cash payment of £2.6bn after unforeseen expenditure on hotels for asylum seekers.

James Cleverly has made a formal request for the money after a shortfall last year, when Suella Braverman was in charge for more than 11 months.

The request, made late in the financial year, has concerned Diana Johnson, the chair of the home affairs select committee. She plans to write to the home secretary to ask why the costs of housing asylum seekers was not included in the department’s main estimates.

The additional cash request has emerged in a written statement as the latest figures show that the number of people crossing the Channel in small boats last month was up 13% compared with the same time last year.

In the written statement, Cleverly said the “net cash requirement for the year exceeds that provided by the main estimate 2023-24”.

He added: “Parliamentary approval for additional resources of £2.6bn will be sought in a supplementary estimate for Home Office. Pending that approval, urgent expenditure estimated at £2.6bn will be met by repayable cash advances from the contingencies fund.”

The overspend, which compares with a total budget of about £20bn, follows a £1bn overspend in the last financial year.

Whitehall sources said the extra cash was spent on hotel rooms for asylum seekers, during a period when the numbers being housed in hotels exceeded 50,000 for the first time.

Johnson said: “The home affairs select committee has raised the issue of missing asylum funding from the department’s main estimate during the course of the year; it appears that this shortfall has now resulted in an emergency cash requirement of £2.6bn.

“I’m concerned that this additional cash requirement has arisen at this point in the financial year. To avoid this happening again, from now on the Home Office must include within its main estimate its best forecast for asylum expenditure. I’ll be writing to the home secretary to request further information and raising it when this is debated in parliament.”

Yvette Cooper, the shadow home secretary, said: “The Tories have completely bust the budget of the Home Office through staggering incompetence and chaos but the taxpayer is paying the price.

“The overspend this year is significantly worse than last year despite all Rishi Sunak’s promises. Their failure to clear the asylum backlog, end the use of hotels for asylum seekers stuck in their broken asylum system or sort out proper contracts has left them with an eye-watering £2.6bn black hole that the British taxpayer will need to fill. Time and again they go for gimmicks rather than ever getting a grip.”

A Home Office spokesperson said: “Financial advances through contingencies funds are planned for each year to enable departments to deliver services with unpredictable final costs, such as the asylum system. This is a routine request and will enable the Home Office to continue to keep the public and the UK’s borders safe.”

Provisional Home Office data shows 1,335 people arrived in the UK from France via small boats in January, compared with the official figure of 1,180 recorded in January 2023.

The total for January 2024 is just slightly lower than the number of arrivals in the first month of 2022.

This week Downing Street said there were “variations” in the number of crossings but it was “too early to say what the trend is for this year”, when asked whether Rishi Sunak was on track to achieve his pledge to “stop the boats”.

The prime minister’s official spokesperson made a similar assertion on Thursday, adding: “On the rolling 12-month stats we’re still down significantly and there is a great deal of work going on with our French counterparts.”