The UK government is considering a proposal that would provide asylum seekers with £100 weekly payments to encourage them to leave government-funded hotels and stay with family or friends instead.

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The Financial Pressure

Currently, housing asylum seekers in hotels costs taxpayers an average of £145 per person each night. Recent figures from June 2025 revealed that 32,000 migrants were living in hotels, resulting in daily costs of £5.5 million or approximately £2.1 billion annually. Prime Minister Sir Keir Starmer has committed to ending hotel accommodation for asylum seekers by the conclusion of this parliamentary term in 2029.

The Proposed Solution

Under the plan being considered by Home Office officials, asylum seekers would receive £100 per week in addition to their standard £49.18 weekly allowance for essential expenses such as food, clothing, and toiletries. The scheme could potentially be trialled in 2026.

Those participating would need to demonstrate they have secured suitable alternative accommodation and maintain regular contact with the Home Office. A government source emphasized that while officials present various options to ministers, not all proposals will necessarily be implemented.

Alternative Accommodation Options

The government is also exploring the use of military facilities. The Ministry of Defence has identified six sites across England and Wales that could accommodate asylum seekers within weeks. These locations include West Tofts and Wretham in Norfolk, Knook Camp in Wiltshire, Brunswick Camp in Surrey, Warcop in Cumbria, and Castlemartin in Pembrokeshire. All sites have received upgrades since 2020 and are currently underutilized by the military.

Recent data suggests this approach may be cost-effective. Existing large-scale accommodation centers at Wethersfield and Napier Barracks in Kent now operate below hotel costs, with Napier charging £108.58 per person per night and Wethersfield costing £132.

Existing Return Programs

The Home Office currently offers a £3,000 payment to asylum seekers or individuals residing in the UK illegally who voluntarily return to their home countries. Officials describe this voluntary returns program as playing a vital role in managing immigration and reducing costs.

Broader Context

A parliamentary report last month criticized the Home Office for mismanaging billions of pounds on asylum accommodation, describing the system as chaotic and allowing private providers to earn excessive profits. The report highlighted significant operational shortcomings in handling the asylum process.

Channel crossings remain a significant challenge. Over the past three days referenced in the report, 1,772 migrants crossed the English Channel. The year’s total had reached 38,726 by that point, exceeding the 32,119 recorded by the same date the previous year and 26,699 in 2023.

Policy Changes

Upon taking office, Sir Keir scrapped the previous government’s Rwanda deportation scheme. In July, Labour negotiated an agreement with France that allows the UK to return small boat arrivals to France in exchange for accepting an equal number of migrants who have applied through official channels. As of Wednesday, 94 migrants had been removed under this arrangement, while 57 had arrived in the UK under its reciprocal terms, receiving three-month visas with the opportunity to formalize their immigration status.

The scheme faced complications when an Iranian migrant who had been deported to France returned to Britain via small boat, requiring a second deportation 18 days after his return. This incident raised questions about the effectiveness of current border control measures.