How much will the Rwanda plan cost taxpayers? Think tank estimates asylum scheme could cost £3.9bn

The cost of the government's scheme to send asylum seekers to Rwanda could hit £3.9billion to remove 20,000 migrants, a new think tank report has found.

Analysis from the Institute for Public Policy Research found that the UK could be spending £230,000 per person sent to Rwanda, compared with £55,000 under the current system. The government has said it doesn't "recognise" the calculations.

By next month, the UK will have paid the Rwandan government £290million even before a flight has taken off. The National Audit Office says this total will rise to £370million, and the government has pledged a further payment of £120million if more than 300 people are sent to east Africa.

Rishi Sunak is set for a Commons showdown tonight as House of Lords amendments to his Rwanda Bill will be voted on by MPs. Sunak has bet his whole premiership on the success of this policy. The government believes that by sending asylum seekers to Rwanda it will deter those crossing the Channel in small boats, something charities and campaigners have questioned.

This has been stalled by legal challenges, with the Supreme Court ruling that the policy was unlawful as there was a risk asylum seekers could be sent back to their home countries, where they're in danger. Sunak hopes that his twin plan, of a legally-binding treaty with Rwanda, which states that no one sent from the UK can be moved out of the country, and a new law declaring the east African country as safe according to Parliament, will get flights off the ground.

However, he is under pressure from both the left and right of his party over the new bill, something the new costs will only heighten. Labour accused the Tories of wasting an "astronomical" amount of taxpayers' money on a "failing scheme".

How much will the Rwanda plan cost taxpayers?

The government has made a number of payments already to Rwanda, with more being in the pipeline - and the initial outlay could reach around £500million. The first payment, which had already been reported on, from 2022-23 was of a total of £140 million paid to Rwanda - which was made of £120 million through an Economic Transformation and Integration Fund and a separate payment of £20 million to set up infrastructure for any asylum seekers sent there.

Home Office permanent secretary Matthew Rycroft revealed that in April 2023, at the start of a financial year, a further payment of £100 million was made to Rwanda. He said that in the 2024-25 financial year, so presumably next month, there will be a further payment of £50 million. The NAO has said that the up front payments will reach £370million over a five-year period.

On top of this, if 300 asylum seekers are sent to Rwanda, the government has pledged a further £120million, and on top of that £150,000 will be paid per individual. There will then be an additional payment of £20,000 to help migrants get settled in the east African country.

The IPPR has estimated that if all 20,000 people who have arrived in the UK by irregular means, including on small boats, since the Illegal Migration Act came into force, were moved to Rwanda, it would cost overall between £1.1billion and £3.9billion. The think tank says the higher figure accounts if all migrants stay in the east African country for five years.

The taxpayer could be spending £230,000 per person sent to Rwanda, compared with £55,000 each if they remained in the UK, the IPPR says. Marley Morris, IPPR associate director for migration, trade and communities, said: “Aside from the ethical, legal and practical objections, the Rwanda scheme is exceptionally poor value for money.

"For it to break even, it will need to show a strong deterrent effect, for which there is no compelling evidence. Under the government’s plans, billions could be sent to Rwanda to remove people who have already arrived irregularly since the Illegal Migration Act was passed. The only winner from this scheme appears to be the Rwandan government itself, which has already secured hundreds of millions without doing much at all.”

What has the government said?

Legal Migration Minister Tom Pursglove has defended the spend, telling Times Radio: "We’ve always been clear that this is an economic and migration partnership. We want to support economic development in Rwanda. And of course, there are quite understandably obligations on us to work with Rwanda to make sure that all of the right infrastructure to support the partnership is in place.

“We are going about this work in a constructive way. Part of that money is helpful in making sure that we can respond to the issues properly that the Supreme Court raised, making sure that the capacity is in place to administer the partnership at the first possible opportunity. And I think it’s right that we go about this in the way that we are and when you consider that we’re spending £8 million a day currently in the asylum system you have to look at those spends in that context. That is not sustainable."

While a spokeswoman for the Prime Minister did not deny that the payments to Rwanda may end up being only a fraction of the cost of this scheme. She said: "There is also separate investment in Rwanda, work we’ve been doing to boost their capability and strengthen their [asylum] system ... this will address hotel costs of £8 million a day which are unacceptable to the taxpayer."

When asked if the policy was value for money, she added: "Broadly we will always assess if government spending is value for money for the taxpayer. We think that in the long term, this approach will reduce the costs we’re facing in the UK of processing and housing asylum seekers. We’re also mindful we have a moral responsibility when lives are being lost in the Channel."

Responding to the IPPR reports, a Home Office spokesperson commented: "The report makes a number of assumptions and modelling calculations that we do not recognise. ‘Without innovative solutions, the cost of housing asylum seekers could reach up to £11 billion per year by 2026.

"Illegal migration costs lives and perpetuates human trafficking, and it is therefore right that we fund solutions to break this unsustainable cycle. The best way of saving taxpayer money is by deterring people from coming here illegally in the first place, and our partnership with Rwanda intends to do just that.”

What has Labour said?

On the costs, Yvette Cooper said: "This is just incredible. The Tories' have wasted an astronomical £290 million of taxpayers' money on a failing scheme which hasn't sent a single asylum seeker to Rwanda. How many more blank cheques will Rishi Sunak write before the Tories come clean about this scheme being a total farce? Britain simply can't afford more of this costly chaos from the Conservatives."

Ralph Blackburn is NationalWorld’s politics editor based in Westminster, where he gets special access to Parliament, MPs and government briefings. If you liked this article you can follow Ralph on X (Twitter) here and sign up to his free weekly newsletter Politics Uncovered, which brings you the latest analysis and gossip from Westminster every Sunday morning.