£50m shortfall in Home Office payments for asylum children

The council says that the government has underpaid it by around £50million, money which it says is owed for taking care of unaccompanied asylum-seeking children who arrive in the UK in Croydon.

New arrivals: Croydon, because of the Home Office in the borough, has to look after more than 10 times the number of asylum-seeking children it is supposed to

The council claims that over the past decade it has looked after more than 5,000 UASCs, after they have registered their entry to the UK at the Home Office’s Lunar House building on Wellesley Road. Croydon is caring for 10 times as many UASCs and care leavers as government guidelines recommend.

Central government is supposed to fund most of the costs incurred by councils around the country for asylum-seeking children. “But this has not happened in Croydon,” the council said in a statement issued this morning.

“Since 2015, Croydon has paid an excess every year of between £7million and £9million to top up the funding received from the Home Office.”

The funding shortfall was mentioned repeatedly in various reports generated by auditors and consultants at the time of Croydon’s financial collapse last year, and was given as a significant contributory factor in the Town Hall’s money problems. There is cross-party agreement at the Town Hall that the government needs to honour its obligations to Croydon, and the asylum-seeking children, over this.

The funding shortfall would also go a long way to help balance the council’s books over coming years, after another Whitehall department, the Ministry of Housing, Communities and Local Government, agreed to a £120million bail-out for the bankrupt borough.

Remarkably, one of the ministers at the Home Office whose responsibilities include asylum and resettlement is none other than Chris Philp, the Conservative MP for Croydon South, who has so far provided thoroughly useless when delivering a proper financial settlement for the area he is supposed to serve.

Responsible: dealing with asylum and resettlement is among the jobs of Chris Philp

Croydon is looking for a fairer deal over UASC, and for local authorities across the country to do more to share the responsibility for new arrivals.

Under government guidelines, unaccompanied asylum-seeking children arrivals should make up 0.07 per cent of each host council’s child population, with councils nationwide taking in the rest.

If these guidelines were followed, the council claims, then Croydon would have responsibility for 66 unaccompanied asylum-seeking children; in fact, there are 205 unaccompanied asylum-seeking children being cared for by Croydon, plus 439 care leavers who arrived unaccompanied. This is over 40 per cent of all children and young people the council looks after.

“The National Transfer Scheme is currently voluntary, which means other councils are not required to take in children from gateway councils like Croydon or Kent,” the council said today.

A council report states that the annual funding gap to support unaccompanied asylum-seeking children is financially unsustainable. If left unaddressed, the council says, it “will in future years pose serious risk to the borough’s children’s services”.

The report adds that 24 other London authorities have agreed to help ease Croydon’s unaccompanied asylum-seeking children costs by taking caring responsibility for new arrivals in the borough from June for three months.

Hamida Ali: the government transfer policy is not working

“The Home Office has never properly funded Croydon to support the asylum-seeking children and young people we care for, and its voluntary national transfer scheme is just not working,” said council leader Hamida Ali.

“The current situation is simply not reasonable. This is a national problem which requires a national solution and what is happening now isn’t fair for anyone – least of all children and young people who have already been through so much.

“We are grateful to the 24 other councils who are stepping in this summer and the support they have offered will help in the short term. But what we all need is a long-term solution that addresses this serious funding gap and shares the responsibility between councils nationally. We want to do our bit to help, and spreading the cost will make it manageable for all of us.

“As long as the Home Office has a local immigration unit in the borough, Croydon will be a gateway for unaccompanied children and young people who desperately need care and support. We want to continue doing that, but we need the Home Office to provide proper funding and make sure its national transfer scheme becomes mandatory for councils across the country.”


  • If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at inside.croydon@btinternet.com
  • Inside Croydon is a member of the Independent Community News Network
  • Inside Croydon works together with the Bureau of Investigative Journalism and BBC London News
  • ROTTEN BOROUGH AWARDS: Croydon was named the country’s rottenest borough in 2020 in the annual round-up of civic cock-ups in Private Eye magazine – the fourth successive year that Inside Croydon has been the source for such award-winning nominations
  • Inside Croydon: 3million page views in 2020. Seen by 1.4million unique visitors

About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
This entry was posted in Children's Services, Chris Philp MP, Croydon Council, Croydon South, Hamida Ali and tagged , , , , , , , . Bookmark the permalink.

3 Responses to £50m shortfall in Home Office payments for asylum children

  1. moyagordon says:

    Councils need to be more on it. Shouldn’t the people at the council dealing with the children know they are not receiving sufficient funds for the number of children they’re caring for and why don’t they flag it up and make sure the correct funding is in place?

    • Of course the council has realised, long ago, that they are spending more on services for UASC than they have budgeted for. The council has been stating that bleedin’ obvious for at least the past six years (search the site for UASC). And in all that time they have been seeking a proper settlement. And in all of that time, the Tory government has ignored them, presenting them with a sharing scheme which obviously other LAs won’t buy in to, and short-changing Croydon (and Kent CCC, which administers Dover) with impunity.

      Most insidious in all this is the role of Philp, who does nothing over the issue, causing deliberate harm to his constituents in Croydon South and seeing their council services reduced as a consequence.

      Silly, petty little power games. Perverse politics at its worst.

  2. Ian Kierans says:

    I am sure Planning will have no problem with giving itself approval and riding roughshod over neighbors to build a unit to house 250 UASC. Perhaps finding the cash might be an issue.putting it in the south of Croydon would get Mr Philps attention purely on the number of emails clogging his inbox.

    But kidding aside. Perhaps we have a statutory obligation to provide this service but the Home office has no legal requirements to fund that obligation? Or perhaps we need to get better at managing the money we are given and stop paying huge amounts to hotels and private landlords who profit off this and provide horrendous conditions?.
    In reality if there is no money from the Home Office to pay for a service they wish us to provide – then we do not pay. It is that simple – or is it?
    I suspect the truth is murkier that than the Beddington Incinerators pollution readings – Perverse Politic’s is perhaps a start – but it seems they descend sharply via contumacious to borderline villainous. In the meantime there are 200+ children in poor conditions we as a humane society are placing them in. Just what have we elected?

Leave a Reply to insidecroydon Cancel reply