Part 2: Beyond the Slogans: Official Figures Show Britain Can’t Fund the NHS or Pensions Without Migration

This continues Part One of our blog series on why im/migration is necessary. Part Three will follow.

The asylum headlines: big bills, small numbers

At this point the political argument often jumps straight from “net migration is too high” to “the asylum system is out of control” – as if the two were the same thing. The National Audit Office’s new report on the asylum system suggests something very different (National Audit Office, An analysis of the asylum system, 2025).

The NAO finds that people seeking asylum made up around 11.4% of overall immigration in 2024, and about 0.16% of the UK population at mid-2024. In other words, asylum seekers are a relatively small share of all those who move here.

This chart has two bars, showing asylum seekers as 0.16% of the UK population and 11.4% of UK immigration in 2024. It underlines that asylum is a small share of total migration and a tiny share of the population, despite its large political and financial footprint. Source: NAO, An analysis of the asylum system (2025): 

Yet the direct cost of supporting people in the asylum system is around £4.0 billion in 2024–25, and total Home Office and Ministry of Justice spending on asylum is estimated at £4.9 billion. The biggest chunk – about £3.4 billion – is asylum accommodation and support, including roughly £2.7 billion on accommodation contracts and hundreds of millions on cash support and grants to councils (NAO, An analysis of the asylum system, 2025).

The watchdog’s verdict is stark: this bill is “disproportionately high” for such a small share of migration, because of long delays and backlogs. People are kept in limbo for months or years, not allowed to work in almost all cases, while the government pays private contractors for hotel rooms and large sites that were never designed to be long-term housing.

The report also makes clear that this figure does not capture the full cost. Local authorities face extra spending on education, English language support, integration and social care that is not covered sufficiently by existing funding arrangements. Central government has, until recently, not even budgeted for asylum costs properly, leading one parliamentary committee in 2023 to say the Home Office had “lost control of the asylum budget”.

In short: the asylum system is expensive not because asylum seekers are especially numerous, but because the state runs an inefficient, stop-start system that keeps people idle and homeless for long periods, and pushes costs onto councils and other departments.

Why the asylum system is so expensive

The NAO’s economic story is not really about numbers of arrivals. It is about the way the system is designed and managed.

First, there is no whole-system grip. Different parts of government – the Home Office, Ministry of Justice, HM Courts and Tribunals Service, local authorities – each have their own duties, budgets and pressures. There is “no single point of accountability for outcomes” and no shared set of objectives for the asylum system as a whole. As a result, ministers lurch from crisis to crisis, “fixing” a backlog in one corner and simply pushing pressure and costs somewhere else.

The NAO gives concrete examples:

• When ministers promised to clear the “legacy” backlog of older cases in 2023, the Home Office did make decisions faster – but the surge in decisions spilled into a fresh backlog in the appeals system, where judges and legal aid providers are already in short supply.

• Faster refusals also meant more people granted protection suddenly leaving Home Office accommodation with very short notice, turning up at already-stretched local authority homelessness services.

• Frequent changes to asylum law and policy – including the Illegal Migration Act and the Rwanda scheme – forced repeated redesigns of processes and casework, creating periods where decisions were effectively paused and backlogs grew again.

Second, there are fundamental barriers the system has never really resolved. Some people whose claims are refused cannot lawfully be removed because their home countries will not co-operate, or because they lack documents that can be verified. Others lodge repeated appeals and fresh submissions which the law rightly allows if there is new evidence. Without a realistic approach to such cases, people will remain in the system for long periods, at public expense, with neither protection nor removal.

Third, capacity is fragile in every part of the system. The report identifies four major bottlenecks: judicial time in the tribunals, a shortage of legal aid providers, high staff turnover among Home Office caseworkers, and a lack of suitable dispersal accommodation which has forced the use of costly hotels. These are not “migration problems”; they are management and workforce problems.

Fourth, the data are poor. Different parts of the system cannot reliably track people and cases from start to finish, which makes it harder to understand what is working, where delays occur and what changes actually achieve.

The combined effect is exactly what any private-sector auditor would expect: money is poured into firefighting, while backlogs, hotel bills and human misery continue to rise. The NAO notes that asylum support costs alone reached £4.7 billion in 2023–24, then £4.0 billion in 2024–25, and that ministers have allocated £200 million to transform the system in the hope of cutting asylum costs by at least £1 billion a year by 2028–29 compared with 2024–25. That saving target is, in effect, an admission that the current model is wasting at least a billion pounds a year.

This chart shows three bars – £4.7 billion (2023–24 outturn), £4.0 billion (2024–25 budget) and £3.0 billion (2028–29 target, reflecting at least £1 billion a year in planned savings). Source: NAO, An analysis of the asylum system (2025): Home Office asylum support outturn 2023/24 & 2024/25, planned savings of at least £1bn a year by 2028/29 vs 2024/25.

Welcoming growth: how a humane asylum system pays for itself

If the NAO shows where money is being wasted, a new study from the London School of Economics shows what a better-designed system could earn for the country.

The report, “Welcoming Growth: The economic case for a fair and humane asylum system”, builds a detailed computer model that follows people through the asylum journey over about twelve and a half years – from arrival and waiting for a decision, through getting refugee status, to working and eventually settling long term. It tests what happens under today’s arrangements and then under three increasingly supportive sets of reforms.

The starting point is sobering. In the baseline, which reflects the current system with average waits of 18 months for a decision and limited support, the public finances essentially break even. The state spends a lot on accommodation and subsistence while people are not allowed to work, then gets some of that money back later through taxes once they finally enter the labour market – but with years of lost potential in between.

The reforms then layer on top of each other:

• Scenario 1: Faster decisions and proper legal advice
Here, asylum decisions are made in about six months instead of 18, and everyone gets access to legal support. Administrative costs rise because more staff are needed, but these are quickly outweighed by lower hotel and dispersal bills and by people moving on with their lives sooner. Overall, this scenario generates around £106,000 in extra total value per person compared with the current system, and delivers a net gain to the public finances of about £7,000 per person over the modelled period.

• Scenario 2: Early language and job support
On top of faster decisions, this scenario adds free English classes and tailored employment help – the kind of support that already exists in small pockets of the UK and in other countries. Refugees find work more quickly, earn higher salaries and pay more in tax. They rely less on welfare and avoid some of the health and homelessness problems that come with long-term poverty. In this scenario, the total net benefit rises to around £266,000 per person, with a net fiscal gain of about £53,000 per person. Every £1 invested in language and job support produces about £9 in extra earnings, and overall employment income is around 76% higher than in the baseline.

• Scenario 3: Specialist mental health care
Finally, the model adds early, refugee-specific mental health support, recognising the high levels of trauma, depression and anxiety found in people who have fled war or persecution. This requires extra spending at the start but pays off as people recover more quickly, work more consistently and use fewer acute health services. It adds another £4,000 or so of net benefit per person, taking the total to just under £270,000 per person, and raises the net fiscal gain to roughly £55,000 per person. Mental health costs fall sharply, and overall asylum-related costs drop by roughly 40%, mainly because people spend far less time stuck in expensive accommodation.

The authors are cautious. They describe their estimates as conservative, noting that they do not fully capture wider social gains such as better community relations or the long-term contributions of refugees’ children. But the direction of travel is clear: a system that is faster, fairer and more supportive not only treats people more humanely, it also saves public money and boosts growth. A slow, punitive system does the opposite – it wastes billions keeping people inactive and unwell.

In other words, the choice is not between “kindness” and “toughness”. It is between a model that locks in high costs and lost tax revenue, and one that turns new arrivals into workers, taxpayers and neighbours far more quickly.

The Shepway Vox Team

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