Shabana Mahmood’s sweeping plans to overhaul the UK asylum system risk creating “unintended consequences” including higher homelessness among asylum seekers and expanding case backlogs, the National Audit Office (NAO) has warned. The watchdog’s leader said the home secretary’s reforms, aimed at speeding up decisions and reducing appeals, can only succeed if critical bottlenecks across the system are resolved.
A new NAO report published on Wednesday revealed significant information gaps within the Home Office, including the number of asylum seekers who do not receive benefits, how many rejected applicants have absconded, and how many are currently subject to enforcement action. Auditors found that years of “short-term, reactive measures” have repeatedly shifted pressure within the asylum system, generating new backlogs and leaving thousands of people waiting years for outcomes. According to the report, more than half of applicants who filed claims almost three years ago still have no decision.
Reform Backlash Inside Labour
The NAO’s findings come only weeks after Mahmood unveiled a reform package inspired by Denmark’s strict immigration model, sparking criticism from Labour MPs and peers. The backlash focused on proposals to allow deportation of children alongside their parents and to extend the waiting time for refugees to secure permanent residency from five to 20 years. The report acknowledged that accelerating decisions and removals could ease pressure, but warned that such proposals were highly complex and required a realistic understanding of how cases move through the system. Without this, the report said, the reforms risk worsening strain on already fragile services, including homelessness support.
Watchdog: System Needs Data, Capacity and Long-Term Planning
Gareth Davies, head of the NAO, said successive governments had relied on narrow, short-term measures to increase efficiency, leaving structural weaknesses unaddressed. He stressed that delivering Mahmood’s new asylum model requires better-quality data, streamlined decision-making, and targeted action to remove bottlenecks. The report highlighted that neither the Home Office nor the Ministry of Justice could provide full data on critical indicators—including the number of applicants receiving no support, the total cases handled by the upper immigration tribunal, or the number of failed removals and their causes.
Billions Spent, But System Still Gridlocked
The NAO estimated total asylum spending for 2024–25 at £4.9bn, with £3.4bn allocated to accommodation and support—an amount that has escalated as councils warn of growing financial pressure. The watchdog urged the government to publish by the end of 2026 a detailed strategic plan for implementing the new asylum model, alongside public “system indicators” to improve transparency for taxpayers and asylum seekers. It also called for a long-term data blueprint to fix chronic quality gaps and ensure future interventions have clear evidence and cost-benefit assessments.
Refugee Council: System “Not Functioning”
Enver Solomon, chief executive of the Refugee Council, said the report exposed a system “simply not functioning.” He described it as “shocking” that more than half of people who applied almost three years ago still have no decision. Solomon said only a whole-system approach involving timely decisions, accurate data, and adequate capacity can restore order and rebuild confidence. He urged the government to prioritise correct decisions the first time and support refugees in integrating into their communities.
Home Office Defends Reforms
A Home Office spokesperson said Mahmood’s reforms represent the most significant overhaul of the asylum system “in a generation” and are designed to address precisely the problems highlighted in the NAO report. The spokesperson said the government has already removed nearly 50,000 people with no right to remain, increased illegal working arrests by 63%, and prevented more than 21,000 small boat crossing attempts this year. They argued the reforms will re-establish control, reduce incentives for illegal entry, and increase removals of those who do not qualify for protection.
The debate comes as the UK faces sustained pressure from rising accommodation costs, local councils warning of financial strain, and renewed scrutiny from European partners over how the UK intends to manage migration following its shift toward more restrictive asylum rules. The government is preparing further legislation early next year to support Mahmood’s overhaul, while charities continue to warn that homelessness and destitution among asylum seekers are already rising.
