Barges and RAF bases more expensive than hotels to house asylum seekers – watchdog
The government’s alternative plans for housing asylum seekers will actually cost the taxpayer millions more than the hotels they seek to replace, according to a public spending watchdog.
A report from the National Audit Office (NAO) said accommodating those waiting for asylum decisions on barges or former RAF bases would cost the Home Office £1.2bn – £46m more than using hotels.
And while £230m is expected to have been spent on developing four alternative sites by the end of March, only two have opened so far – and they were only housing around 900 people by the end of January.
As a result, performance reviews have now rated the Home Office as “red”, meaning its delivery goals appear “unachievable”.
The head of the NAO, Gareth Davies, said that while the government had “made progress” in cutting hotel numbers by 60 from the 398 being used before January, it had “incurred losses and increased risk” by “rapidly progressing its plans to establish large sites”.
He called on the Home Office to “reflect on lessons learned” and “improve coordination” with local authorities.
However, Labour’s shadow home secretary Yvette Cooper called the conclusions “staggering” and accused Prime Minister Rishi Sunak of having “taken the Tories chaos and failure in the asylum system to a new level”.
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Archbishop of Canterbury: Asylum system is broken
The report comes as the government continues to battle to get its Rwanda plan through parliament, with the aim of deterring asylum seekers from making dangerous Channel crossings to the UK – but it has received huge criticism from opposition MPs, campaigners and even the courts.
The bill will head back to the House of Lords today, but peers are expected to push for extra changes and the watering down of some of the policy before letting the legislation come into force.
Faith leaders, including the Archbishop of Canterbury, publicly backed proposals to overhaul the “broken” asylum system in the UK.
Recommendations from the independent Commission on the Integration of Refugees include allowing migrants to work in the UK after six months of waiting for an asylum decision, and giving arrivals free English lessons from the first day they arrive.
The Most Rev Justin Welby said: “It’s widely acknowledged that our asylum system is broken – it needs rebuilding with compassion, dignity and fairness at the centre.
“This requires thoughtful, well-informed consideration which promotes collaboration and common ground, not division.”
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Archbishop of Canterbury Justin Welby has been a vocal critic of the Rwanda scheme
Setbacks in alternate accomodation
The government made ending the use of hotels for asylum seekers a key pledge in 2022, estimating that the rooms were costing the taxpayer £8m a day.
Ministers claimed the Bibby Stockholm barge in Portland, Dorset, two former RAF bases in Scampton, Lincolnshire, and Wethersfield, Essex, and ex-student accommodation in Huddersfield, West Yorkshire, would cut costs – despite opposition over the suitability of the sites.
But the barge has faced a raft of setbacks – including an outbreak of Legionella in the days after it took its first asylum seekers – and, according to the NAO, the set-up costs of the RAF bases have risen from £5m each to £49m for Wethersfield and £27m for Scampton.
The watchdog’s report also said only Wethersfield and the Bibby Stockholm had begun housing people, with just 576 men placed at the former – which has a capacity of 1,700 – and 321 men at the latter – which has room for around 500 – by the end of January, though Scampton and Huddersfield should start taking people in the next two months.
Following the government’s decision to scale back the capacity at Scampton from 2,000 to 800, the NAO said the Home Office was considering reducing the maximum amount at Wethersfield too.
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Closing asylum hotels saving money?
Elsewhere in the report, the NAO accused the Home Office of prioritising awarding contracts “quickly”, and “modifying existing contracts over fully-competitive tenders”, with “overly-ambitious accommodation timetables” leading to “increased procurement risks”.
They criticised the lack of engagement with local communities before deploying emergency planning rules so the sites could be used.
And they said there were “uncertainties” around the implementation of the Illegal Migration Act, which made it harder to predict what asylum accommodation would be needed going forward.
NAO chief Mr Davies said: “The Home Office has made progress in reducing the use of hotels for asylum accommodation. Yet the pace at which the government pursued its plans led to increased risks, and it now expects large sites to cost more than using hotel accommodation.
“The Home Office continued this programme despite repeated external and internal assessments that it could not be delivered as planned.
“Its plan to reset the large sites programme makes sense, and the Home Office should reflect on lessons learned from establishing its large sites programme at speed and improve coordination with central and local government given wider housing pressures.”
The chair of the Public Accounts Committee, Meg Hillier, criticised the Home Office for not understanding the challenges it faced in setting up large sites and “moved too quickly, incurring losses, increasing risks and upsetting local communities, and the sites are housing fewer people than planned”.
She added: “The Home Office must do better when it resets its programme and provide safe and suitable accommodation for asylum seekers at the best value for taxpayers’ money.”
And Labour’s Ms Cooper added: “The prime minister claimed that 10,000 people would be housed in these major sites to save money on costly hotels.
“That plan has failed on every level with only a fraction of that number on those sites and the costs going through the roof.
“Labour will clear the backlog, end asylum hotel use and set up a new returns and enforcement unit so those with no right to be in the UK are swiftly returned.”
A Home Office spokesperson said: “We have always been clear that the use of asylum hotels is unacceptable, and that’s why we acted swiftly to reduce the impact on local communities by moving asylum seekers on to barges and former military sites.
“While we must provide adequate accommodation for asylum seekers who would otherwise be destitute, thanks to the actions we have taken to maximise use of existing space and our work to cut small boat crossings by a third last year, the cost of hotels will fall – and we are now closing dozens of asylum hotels every month to return them to communities.
“But we have further to go, which is why we are passing the Safety of Rwanda Bill, deterring Channel crossings and get flights off to Rwanda – because it is only when people are discouraged from taking those journeys that we can end asylum hotel use for good.
“While the NAO’s figures include set up costs, it is currently better value for money for the taxpayer to continue with these sites than to use hotels.”
United States Senator Cynthia Lummis suggests the crypto industry may be celebrating too soon over the US Federal Reserve softening its crypto guidance for banks.
“The Fed withdrawing crypto guidance is just noise, not real progress,” Lummis said in an April 25 X post. Lummis called the Fed’s April 24 announcement — withdrawing its 2022 supervisory letter that had discouraged banks from engaging with crypto and stablecoin activities — “just lip service.”
Lummis’ tone was different from the rest of the crypto industry
Lummis, a pro-crypto advocate known for introducing the Bitcoin (BTC) Strategic Reserve Bill in July 2024, pointed out several flaws in the Fed’s announcement, even as Strategy founder Michael Saylor and crypto entrepreneur Anthony Pompliano suggested it was a step forward for banks and crypto.
She argued that the Fed continues to “illegally flout the law on master accounts” and still relies on reputational risk in its bank supervision practices. It comes as the Federal Insurance Deposit Corporation (FDIC) is working on a rule to stop examiners from considering reputational risk when reviewing a bank’s operations, according to a recent Bloomberg report.
Lummis also highlighted the Fed’s policy statement in Section 9(13), which hasn’t been withdrawn, stating that Bitcoin and digital assets are considered “unsafe and unsound.”
She also reiterated many of the same staff behind Operation Chokepoint 2.0 are still involved in crypto policy today.
“We are NOT fooled. The Fed assassinated companies within the industry and hurt American interests by stifling innovation and shuttering businesses. This fight is far from over.”
“I will continue to hold the Fed accountable until the digital asset industry gets more than a life jacket, Chair Powell — they need a fair shake,” Lummis said.
Related: If Trump fired Powell, what would happen to crypto?
Custodia Bank founder and CEO Caitlin Long seemed to share a similar view to Lummis.
“THANK YOU for seeing this for what it is,” Long said.
However, many crypto executives praised the Fed’s announcement as a positive development for the industry. Saylor said in an April 25 X post that the Fed’s move means that “banks are now free to begin supporting Bitcoin.”
Anastasija Plotnikova, co-founder and CEO of blockchain regulatory firm Fideum, said the Fed’s decision “is a significant development, as it will simplify the path to institutional adoption.”
Magazine: Ethereum is destroying the competition in the $16.1T TradFi tokenization race
In one of his first appearances as the recently sworn-in chair of the US Securities and Exchange Commission, Paul Atkins delivered remarks to the agency’s third roundtable discussion of crypto regulation.
In the “Know Your Custodian” roundtable event on April 25, Atkins said he expected “huge benefits” from blockchain technology through efficiency, risk mitigation, transparency, and cutting costs. He reiterated that among his goals at the SEC would be to facilitate “clear regulatory rules of the road” for digital assets, hinting that the agency under former chair Gary Gensler had contributed to market and regulatory uncertainty.
“I look forward to engaging with market participants and working with colleagues in President Trump’s administration and Congress to establish a rational fit-for-purpose framework for crypto assets,” said Atkins.
Some critics of US President Donald Trump see Atkins’ nomination to lead the SEC as a nod to the crypto industry, acting on campaign promises to remove Gensler — the former chair resigned the day Trump took office — and cut back on regulation. Democratic lawmakers on the Senate Banking Committee questioned Atkins on his ties to the industry, potentially presenting conflicts of interest in his role regulating crypto.
Related: Atkins SEC era sparks massive industry optimism, crypto execs speak out
The direction of the SEC under new leadership
“We’ve noticed that we don’t have to be as concerned […] about being accused of things that we’re not doing, like being broker-dealers for securities,” Exodus chief legal officer Veronica McGregor, who participated in the roundtable, told Cointelegraph on April 24.”It’s just a less scary regulatory environment in general. It is, however, still unclear what the ultimate regs are going to look like for crypto.”
The SEC crypto task force is scheduled to hold two more roundtables in May and June to discuss tokenization and decentralized finance, respectively. Commissioner Hester Peirce, who leads the task force, told Cointelegraph in March that she welcomed the opportunity to work with Atkins to “reorient the agency,” hinting at an SEC with regulations more favorable to the crypto industry.
In addition to the roundtables, the crypto task force has reported several meetings with digital asset firms to discuss various policies and considerations in developing a regulatory framework.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
Nasdaq has urged the US Securities and Exchange Commission (SEC) to hold digital assets to the same regulatory standards as securities if they constitute “stocks by any other name,” according to an April 25 comment letter.
The exchange said the US financial regulator needs to establish a clearer taxonomy for cryptocurrencies, including categorizing a portion of digital assets as “financial securities.” Those tokens, Nasdaq argued, should continue to be regulated “as they are regulated today regardless of tokenized form.”
“Whether it takes the form of a paper share, a digital share, or a token, an instrument’s underlying nature remains the same and it should be traded and regulated in the same ways,” the letter said.
It also proposed categorizing a portion of cryptocurrencies as “digital asset investment contracts,” to be subject to “light touch regulation” but still overseen by the SEC.
Related: Certain stablecoins aren’t securities, SEC says in new guidance
Regulatory U-turn
The SEC has dramatically pivoted its stance on cryptocurrency oversight since US President Donald Trump took office in January.
Under the leadership of former Chair Gary Gensler, the SEC took the position that practically all cryptocurrencies, with the exception of Bitcoin (BTC), represent investment contracts and therefore qualify as securities.
This stance led the agency to bring upwards of 100 lawsuits against crypto firms for alleged securities law violations.
However, under Trump nominee Paul Atkins, who was sworn in as chair on April 21 after a lengthy Senate confirmation, the SEC has claimed jurisdiction over a narrower segment of cryptocurrencies.
In February, the agency issued guidance stating that memecoins — if clearly identified as purely speculative assets with no intrinsic value — do not qualify as investment contracts pursuant to US law.
In April, the SEC said that stablecoins — digital tokens pegged to the US dollar — similarly do not qualify as securities if they are marketed solely as a means of making payments.
Integrating crypto into TradFi
In its April 21 letter, Nasdaq said existing financial infrastructure “can readily absorb digital assets by establishing the proper taxonomy and calibrating certain rules to reflect what is truly new and novel about digital assets.”
The Depository Trust & Clearing Corporation (DTCC) — a private US securities clearinghouse closely overseen by the SEC — has been laying the foundation for integrating blockchain technology into regulated financial markets.
In March, the DTCC committed to promoting Ethereum’s ERC-3643 standard for permissioned securities tokens.
Magazine: Ethereum is destroying the competition in the $16.1T TradFi tokenization race
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