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The source of billions of pounds of funding used by the UK government to support asylum seekers could be “closed off” if new legislation aimed at curbing cross-Channel migration takes full effect, according to Britain’s aid watchdog.
The Independent Commission for Aid Impact (ICAI) said on Tuesday that the Home Office would not be able to classify the costs of supporting refugees “in-country” as aid once the Illegal Immigration Act, passed by parliament in July, came into full force.
The impact of the legislation — which bars anyone entering the UK without prior permission from claiming asylum — would potentially blow a multibillion pound hole in the department’s budget, according to research by the ICAI, which monitors the effectiveness of UK aid spending.
“Our analysis of the aid rules suggests that the Illegal Migration Act, if fully implemented, could close off the main source of funding the government is using to house asylum seekers,” said Tamsyn Barton, ICAI chief commissioner.
Some of the humanitarian costs, including for housing and food, that are associated with supporting refugees in their first year of arrival in a country qualify as aid under international rules. But this is not the case if any form of coercion, such as detention or deportation, applies.
In addition to blocking prospective asylum seekers who lack permission from entering Britain, the illegal migration act will force the Home Office by law to detain them before removal either to their country of origin or a “safe” third country.
Enforcement of the act has been delayed, notably as a result of continuing legal challenges to government plans to deport refugees to Rwanda.
But refugee and migration experts say that even if the Rwanda policy is approved by the Supreme Court, tens of thousands of migrants will remain in limbo in the UK and in need of government support.
The Home Office has been able to cover the ballooning recent costs associated with the backlog in processing asylum claims by drawing funds from the UK’s budget for overseas development aid.
Last month, official data showed that the cost of the asylum system had nearly doubled in the year to June 2023 to almost £4bn, largely because of the backlog of 175,457 asylum claims and the £6mn a day the government says it is spending on associated hotel costs.
In a report published earlier this year, ICAI argued that the Home Office’s ability to cover these costs via the aid budget disincentivised efficiency. Almost one-third of the aid budget, or £3.6bn, was spent on in-country support for refugees in 2022-23, it said, greatly reducing the impact of UK aid abroad.
Barton said that under current rules the Foreign, Commonwealth and Development Office “has to cut other aid programmes in order to meet these costs”, but that under the new act “they would have to be met by the Home Office out of its own budget”.
The Home Office said the Illegal Migration Act would mean that “people who come to the UK illegally will not have a right to stay”.
“Instead, they will be liable to be returned either to their home country or relocated to a safe third country, breaking the business model of people smugglers and stopping the unprecedented strain on our asylum system,” it added.
Speaking about irregular migration on Tuesday, immigration minister Robert Jenrick told MPs that the UK had the most “comprehensive of any strategy to tackle the problem in Europe”, but his Labour shadow Stephen Kinnock described government migration policies as an “omnishambles”.