Will the government save £1bn a year from ending asylum hotels?published at 18:16 British Summer Time 12 June
Ben Chu
BBC policy and analysis correspondent
While some of the team have been busy ing footage from the Air India crash, others have been mulling over yesterday’s Spending Review.
Specifically we've been looking at the government's pledge of £200m in new funding to clear the asylum backlog, external and end the use of hotels to house asylum seekers. The government said this would reduce asylum costs by at least £1bn per year by 2028‑29 compared with 2024-25.
But there’s some important context behind this.
Though it’s been coming down, the asylum backlog - the number of people waiting for an initial decision on their claim - was still more than 109,000 in March 2025., external The number of people making new claims was also still relatively high, at 23,000 in the first quarter of this year.

And along with the continuous rise of small boat arrivals (the majority of whom go on to claim asylum), this suggests financial pressure is likely to remain on the asylum system.
The share of asylum seekers receiving government and living in hotels has come down from a peak of 45% in September 2023 to 30% in March 2025. Yet the government will still have to house asylum seekers somewhere - given that many are destitute and unable to work - and that will have a cost.
Therefore, there is a legitimate question mark over whether those £1bn targeted savings from the asylum system are realistic. As the small print of the Spending Review itself notes: “Asylum costs forecasts contain some inherent uncertainty.”