Treasury advisers tasked with finding government waste have identified spending on accommodation for people such as asylum seekers as their top priority. The Office for Value for Money (OVfM), which has 15 members of staff and reports directly to the chancellor, was launched in October. But a Treasury response to a BBC Freedom of Information request revealed that as of last month the team had not started scrutinising any investment proposals. Government documents released on Tuesday showed the first two areas it will investigate are government spending on short-term accommodation and multi-billion pound so-called “mega projects” such as HS2. The OVfM is aiming to cut departmental spending by £4bn annually starting this year. Labour previously said the “hit team” would ensure that “every penny of taxpayers’ money is spent wisely”.
Concerns have been raised by both Conservative and Labour ministers in recent years about how much public money goes on short-term accommodation costs. The Treasury says the Home Office spent £2.3bn on hotels for asylum seekers in 2022-23. Further government money was spent on accommodation for veterans, care leavers, survivors of domestic abuse, victims of modern slavery and those fleeing war. The Institute for Public Policy Research think tank reported in 2024 that per asylum seeker, costs had increased by 141% to £41,000 last year – up from £17,000 in 2019-20. Some in government question whether departments signing separate accommodation contracts get the best value.
The Local Government Association (LGA), which represents councils in England, has said that “uncoordinated” procurement of accommodation has “driven up local accommodation costs”. It says this has left “large numbers of properties void in areas where the demand from those cohorts is lower than supply”. The OVfM’s investigation into accommodation costs will involve the Home Office, Ministry of Housing, Ministry of Defence and Ministry of Justice.
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