Labour’s plan to redistribute asylum seekers to more affluent areas is unlikely to succeed under the current system using private providers, experts have warned.
Andy Burnham has said every area should “play their part” in dealing with the large number of asylum seekers currently being supported, which was 97,519 at the end of March, according to Home Office figures.
More than two-thirds are living in “dispersal” accommodation, usually Houses in Multiple Occupation (HMOs), of which more than 31,000 are in the north of England.
More than 17,000 are in the north-west of England alone compared with just 2,268 in the south-west.
According to reports, the Government will attempt to even out the distribution by increasing the rent cap, which dictates how much the Home Office pays third-party companies to provide housing.
The Home Office has not publicly shared a figure for how much it pays each provider per asylum seeker per night; however, ministers said the average cost across all dispersal accommodation was £23.25 per person per night in June 2025.
By comparison, it costs £144.98 per night for an asylum seeker to stay in a hotel or £132 per night to stay in the converted airfield at Wethersfield in Essex.
South ‘not taking fair share’
The Government wants to stop all use of hotels for asylum seeker accommodation and therefore the numbers in dispersal accommodation are expected to increase.
But Burnham has said repeatedly he believes it is unfair for some areas, especially those with high deprivation levels, to accommodate a much higher proportion of asylum seekers.
This is why ministers are considering whether offering a higher price for HMO accommodation would help spread them more evenly.
The Home Office already sets a figure for the total number of asylum seekers it expects each area of the UK to look after in dispersal accommodation.
But the latest data shows the north-west is accommodating 17,218 people, which is 128 per cent of its target, and the north-east is accommodating 6,964, which is 165 per cent of its target.
By comparison, the east of England, London, the south-east and the south-west are all accommodating less than 30 per cent of their target.
Woking Council, for example, serves one of the most affluent populations in the country and is accommodating only two asylum seekers, the data shows.
Some places such as Mid Devon and East Hertfordshire are not accommodating a single asylum seeker.
‘You can’t force accommodation firms to use more expensive properties’
But it remains unclear whether increasing the rent cap would necessarily lead to such places taking in more asylum seekers.
The Home Office has previously varied its contracts with providers in a bid to distribute asylum seekers more evenly without success.
“You could increase the pricing; that means costs go up,” said Marley Morris, a researcher in migration at the think-tank IPPR.
“You could increase the volume caps so that there’s scope to potentially redistribute to other areas.
“The challenge is that that’s been tried before; it’s had some success; there’s been some movement over the past few years.
“There are much fewer authorities that don’t accommodate any asylum seekers.
“But it’s still not where the Prime Minister wants it to be.
“Providers will go to areas where it is cheaper; they have that incentive. You do have some authorities aren’t as keen to cooperate.”
Three companies currently have contracts to provide asylum seeker accommodation until 2029, projected to cost more than £15bn.
They are: Serco in the north-west, Midlands, and east of England; Clearsprings in the south of England and Wales and Mears in the north- east of England, Yorkshire and the Humber, Scotland and Northern Ireland.
Previous attempts have failed
A report published by the Home Affairs Select Committee last October said the current system is “failed, chaotic and expensive”.
MPs said that despite efforts to vary contracts, the Home Office has “failed to achieve its targets for an equitable distribution of asylum seekers” and that they are “still heavily concentrated in particular areas, often areas of high deprivation.”
They said that there are still concerns that providers procure asylum seeker accommodation “on the basis of cost, rather than equity.”
Morris said he believes the government should look at a more radical approach to improve the situation.
“There’s no harm in trying to renegotiate the contracts, but I think it’s unlikely that with the way the current contracts are structured that you will completely shift the amount of accommodation [in any one area],” he added.
“It’s going to be a gradual process.
“My preference would be for authorities to have greater control over the procurement of accommodation in their area.
“You would have to discuss a mechanism for how many people you route into different areas and have a better balance across the country.”
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