New law may block aid being spent on asylum seekers in UK, says watchdog

Ministers could be blocked from spending billions of pounds of foreign aid on housing asylum seekers in the UK by the government's own new immigration law, an independent watchdog says.

The Independent Commission for Aid Impact says the Illegal Migration Act means those arriving in small boats are no longer deemed to be asylum seekers.

Therefore they are no longer eligible for Overseas Development Assistance.

In 2022, the Home Office spent £2.4bn of the foreign aid budget.

Under international rules, governments can spend foreign aid in their own countries on humanitarian support for refugees and asylum seekers.

The Home Office, if it fully implements its Illegal Migration Act, may therefore have to find money for accommodation from other budgets, while the Foreign Office may have billions more to spend in developing countries.

Responding to the report, the Home Office said its assessment of the impact on overseas aid was ongoing.

"The Illegal Migration Act will mean that people who come to the UK illegally will not have a right to stay," a government spokesperson said.

"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."

Chairwoman of the Commons International Development Committee and Labour MP, Sarah Champion, said the government had scored a "spectacular own goal".

"Spending billions of our greatly reduced foreign aid budget in the UK - the bulk of it on hotels for the tens of thousands of people awaiting an asylum decision in a horribly backlogged system - was always counter-productive.

"Spending in this manner was against the spirit of the ODA [Overseas Development Assistance] rules and now it seems with the Illegal Migration Act, the government has made its policy in breach of those same rules."

She said the aid budget should now be spent on "tackling the reasons people flee their homes, not deal with the consequences".

Dr Tamsyn Barton, the watchdog's chief commissioner, said: "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."

She added that using the aid budget on hotel costs for asylum seekers rather than supporting people in their home countries was "inequitable as well as inefficient".