Barges and RAF bases more expensive than hotels to house asylum seekers – watchdog

Published

1 year ago

March 20, 2024

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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”.

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.”

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.

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.”

Politics

Stablecoins are the best way to ensure US dollar dominance — Web3 CEO

Published

5 hours ago

April 6, 2025

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Stablecoins are the best way to ensure US dollar dominance — Web3 CEO

Stablecoins are the single best tool for the United States government to maintain the US dollar’s hegemony in global financial markets, according to LayerZero Labs CEO and founder Bryan Pellegrino.

In an interview with Cointelegraph, the CEO of LayerZero Labs, which created the LayerZero interoperability protocol recently chosen by Wyoming to be the distribution partner for the Wyoming stablecoin, said that the cross-border accessibility of dollar-pegged tokens makes them an obvious choice to drive US dollar demand. Pellegrino added:

“Stablecoins for the US dollar are the single best tool — the last Trojan Horse or vampire attack on every single other currency in the world — whether it is Argentina, whether it is Venezuela, whether it is all of the countries that have massive inflation.”

The CEO said he expects support for stablecoins on both the federal and state levels to grow because of the obvious boost stablecoins give to the US dollar in foreign exchange markets and the financial moat stablecoin-driven demand will create around the US dollar’s global reserve currency status.

Dollar, US Government, Stablecoin — *Stablecoin market overview. Source:* *RWA.XYZ*

US government looks to stablecoins to protect US dollar

Pellegrino cited Tether’s emerging role as one of the largest buyers of US Treasury bills in the world as evidence of the demand for US debt instruments from stablecoin issuers.

Tether recently became the seventh-largest holder of US Treasuries, beating out Canada, Germany, Norway, Hong Kong, and Saudi Arabia.

Speaking at the White House Crypto Summit on March 7, US Treasury Secretary Scott Bessent said the Trump administration would leverage stablecoins to extend US dollar hegemony and indicated this would be a top priority for officials in 2025.

According to a 2023 report from Chainalysis, over 50% of all the digital asset value transferred to countries in the Latin American region, including Argentina, Brazil, Columbia, Mexico, and Venezuela was denominated in stablecoins.

The low transaction fees, relative stability, and near-instant settlement times for dollar-pegged stablecoins make these real-world tokenized assets ideal for remittances and stores of value for residents in developing countries suffering from high inflation and capital controls.

Magazine: Bitcoin payments are being undermined by centralized stablecoins

Politics

CFPB likely to step back from crypto regulation — Attorney

Published

7 hours ago

April 6, 2025

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CFPB likely to step back from crypto regulation — Attorney

The Consumer Financial Protection Bureau (CFPB) will likely see a reduced role in crypto regulations as other federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume a bigger role in crypto policy, according to Ethan Ostroff, partner at the Troutman Pepper Locke law firm.

“I think with the current administration, my sense is, we are highly likely to see a significant pullback by the CFPB in the context of the activity by other regulators,” Ostroff told Cointelegraph in an interview.

State regulators also have the authority under the Consumer Financial Protection Act (CFPA) to assume some of the regulatory roles of the CFPB, the attorney said but also added that some regulatory functions will continue to fall within the purview of the CFPB as a matter of established law.

Ostroff cited the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as regulators to keep an eye on as potential leaders of crypto regulations at the state level.

However, the attorney clarified that while the CFPB may see a diminished role during the Trump administration, the agency would not be outright dismantled during the current regime due to “statutorily mandated obligations and requirements” that require acts of Congress to change.

Trump administration targets CFPB in efficiency push

The Trump administration targeted the CFPB as part of a broader push by the Department of Government Efficiency (DOGE) to slash government spending and reduce the federal debt.

Russell Vought, the recently appointed head of the CFPB, announced major funding cuts to the agency and scaled back operations within days of assuming the helm at the CFPB in February 2025.

Bitcoin Regulation, US Government, United States, Donald Trump — *Source:* *Russell Vought*

Massachusetts Senator Elizabeth Warren criticized Elon Musk for dismantling the CFPB, which the US senator co-founded back in 2007.

Warren characterized Musk as a “bank robber” and claimed that the Trump administration dismantled the CFPB to undo consumer protection rules and have greater control over the financial system.

In a February 12 interview with Mother Jones, the senator stressed that the Executive Branch of government does not have the statutory authority to fully dismantle the CFPB, which can only be done through Congressional approval.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

Politics

Nearly 400,000 FTX users risk losing $2.5 billion in repayments

Published

14 hours ago

April 6, 2025

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Nearly 400,000 FTX users risk losing .5 billion in repayments

Nearly 400,000 creditors of the bankrupt cryptocurrency exchange FTX risk missing out on $2.5 billion in repayments after failing to begin the mandatory Know Your Customer (KYC) verification process.

Roughly 392,000 FTX creditors have failed to complete or at least take the first steps of the mandatory Know Your Customer verification, according to an April 2 court filing in the US Bankruptcy Court for the District of Delaware.

FTX users originally had until March 3 to begin the verification process to collect their claims.

“If a holder of a claim listed on Schedule 1 attached thereto did not commence the KYC submission process with respect to such claim on or prior to March 3, 2025, at 4:00 pm (ET) (the “KYC Commencing Deadline”), 2 such claim shall be disallowed and expunged in its entirety,” the filing states.

Nearly 400,000 FTX users risk losing $2.5 billion in repayments — *FTX court filing. Source:* *Bloomberglaw.com*

The KYC deadline has been extended to June 1, 2025, giving users another chance to verify their identity and claim eligibility. Those who fail to meet the new deadline may have their claims permanently disqualified.

According to the court documents, claims under $50,000 could account for roughly $655 million in disallowed repayments, while claims over $50,000 could amount to $1.9 billion — bringing the total at-risk funds to more than $2.5 billion.

The next round of FTX creditor repayments is set for May 30, 2025, with over $11 billion expected to be repaid to creditors with claims of over $50,000.

Under FTX’s recovery plan, 98% of creditors are expected to receive at least 118% of their original claim value in cash.

How FTX users can complete KYC

Many FTX users have reported problems with the KYC process.

However, users who were unable to submit their KYC documentation can resubmit their application and restart the verification process, according to an April 5 X post from Sunil, FTX creditor and Customer Ad-Hoc Committee member.

Impacted users should email FTX support (support@ftx.com) to receive a ticket number, then log in to the support portal, create an account, and re-upload the necessary KYC documents.

FTX’s Bahamian subsidiary, FTX Digital Markets, processed the first round of repayments in February, distributing $1.2 billion to creditors.

The crypto industry is still recovering from the collapse of FTX and more than 130 subsidiaries launched a series of insolvencies that led to the industry’s longest-ever crypto winter, which saw Bitcoin’s (BTC) price bottom out at around $16,000.

While not a “market-moving catalyst” in itself, the beginning of the FTX repayments is a positive sign for the maturation of the crypto industry, which may see a “significant portion” reinvested into cryptocurrencies, Alvin Kan, chief operating officer at Bitget Wallet, told Cointelegraph.