Burnham faces hurdles bringing UK asylum system under public control - Bloomberg

Prime Minister Andy Burnham is encountering substantial financial and logistical challenges in his attempt to shift the UK's asylum system away from private sector involvement, according to Bloomberg. In the fiscal year 2024-25, the UK allocated approximately £4.9 billion ($6.6 billion) to its asylum system, with a significant portion spent on accommodations and support for those awaiting decisions on their applications.

Numerous private contractors, including Clearsprings Ready Homes, Serco Group, and Mears Group, are responsible for 10-year accommodation contracts amounting to around £15 billion, approximately three times their initially anticipated cost. The issue has been particularly contentious regarding the use of hotels, which have incurred costs exceeding £2 billion in the period ending March 2025.

An average of 34,000 asylum seekers were accommodated in these hotels. Burnham has committed to ending the use of hotels by 2029 and has expressed support for local councils assuming greater responsibility for finding accommodations, but this transition faces numerous obstacles. Municipal budgets are already under strain, with limited affordable housing options available, and some councils resist accepting additional asylum seekers.

Reform UK, a political party controlling 24 English councils and the largest party in nine others, has explicitly stated that its councils would refuse to take on more asylum seekers. Other local authorities have demonstrated limited enthusiasm for assuming greater responsibility. Despite a reported £1 billion reduction in overall asylum costs since the general election, driven by fewer applications, decreased support costs, and fewer individuals residing in hotels, the system remains under considerable pressure.

The appeals backlog has surged to nearly 90,000 by the end of March, despite efforts to expedite the processing of initial claims. The government aims to distribute asylum seekers more evenly across the country, moving away from concentrations in lower-income areas where accommodation expenses are comparatively lower. Achieving this goal could be financially burdensome and encounter resistance from wealthier districts, further complicating Burnham's broader ambition to consolidate more government services under public control.