Council leaders say the plan will save money over time. They argue it will allow asylum seekers to be supported properly through local council services and, once the asylum backlog is dealt with, the homes can be added to the wider social housing system and used more flexibly by local people.
Under a controversial pilot scheme introduced by the Labour Government, asylum seekers will be housed in newly built or refurbished council homes. The move has already caused anger and concern, especially at a time when many families are struggling to find affordable housing. The Home Office has committed £100 million to the scheme, which will help councils either build new properties or renovate existing ones specifically for asylum accommodation. Around 900 homes are expected to be created through the programme.
At the start, these homes will be rented back to the Home Office while the pilot is running. Later, once the scheme ends, the properties will be absorbed into council housing stock and made available for general use within local communities. Nearly 200 councils have shown interest in taking part. Five Labour-run councils are already lined up to join, including Brighton and Hove, Hackney, Peterborough, Thanet and Powys.
Brighton and Hove City Council leader Bella Sankey described the scheme as a “win-win”. She said the current system wastes public money by handing huge profits to private companies that run asylum housing. In her view, councils managing accommodation directly would be cheaper and fairer, and could eventually lead to private contractors such as Serco, Clearsprings and Mears being removed from the process altogether.
The main aim of the policy is to move asylum seekers out of expensive hotels and private rented housing. At the moment, around 36,000 asylum seekers are living in hotels, while another 71,000 are in longer-term accommodation within communities. Contracts with private firms have surged in cost, growing from £4.5 billion to £15.3 billion, and critics have described the system as badly managed and wasteful. Council leaders believe taking control locally will cut costs in the long run, improve support services, and leave behind housing that can benefit everyone once asylum pressures ease.
Despite these arguments, the plan is highly sensitive. England currently has about 1.33 million households on social housing waiting lists, the highest figure since 2014. Many fear the scheme could anger residents who have been waiting years for a council home, creating resentment and setting struggling locals against asylum seekers.
Rotherham Council leader Chris Read has warned that councils could become the focus of public anger, especially following riots linked to migration tensions last summer. Reform UK councillor George Madgwick has strongly criticised the idea, saying it appears to put people who arrived in the country on small boats ahead of those who were born and raised in local communities.
Some Labour MPs have defended the plan, arguing that asylum seekers should be shared more fairly across the country instead of being concentrated in poorer areas where private rents are cheaper. The Home Office has said it is working closely with councils to find suitable alternatives to hotels and has repeated its promise to shut all asylum hotels.
Even so, with protests already taking place and the housing shortage continuing to bite, many believe this pilot scheme could trigger a new wave of backlash against the government’s migration and housing policies.
