The number of asylum seekers living in taxpayer-funded hotels has fallen, new figures have revealed.

The Home Office said some 32,345 migrants were in contingency hotels, down from 38,079 in December.

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But it is still higher than when Labour took office, when the figure stood at 29,585.

It comes after the spending watchdog, the National Audit Office, warned migrant hotels and accommodation will cost £15 billion over 10 years.

Taxpayers will shell out £4,191,780 a day on housing asylum seekers over the life of the 10-year contracts awarded to Serco, Clearsprings Ready Homes and Mears Group in 2019.

This is triple what the Home Office predicted and the average yearly cost of asylum accommodation is now expected to be higher than the amount ministers hope to save from cutting the winter fuel payment.

Fears are intensifying the bill will rise further, with a record number of migrants crossing the Channel this year heaping even more pressure on the creaking asylum system.

It added that the number of people seeking asylum housed in Home Office accommodation rose by 134% between December 2019 and 2024, from 47,000 to 110,000.

The NAO report – sent to the Home Affairs Select Committee inquiry on asylum accommodation – also detailed that those temporarily living in hotels accounted for 35% of all people in asylum accommodation, and for about 76% of the annual cost of contracts – £1.3 billion of an estimated £1.7 billion in 2024-25.

Some 110,000 asylum seekers were living in taxpayer-funded accommodation, as of December, the watchdog revealed. Around 42,000 were in Home Office ‘contingency accommodation’, including 38,000 in hotels.

The National Audit Office admitted asylum hotels “may be more profitable” for companies holding the contracts than other types of housing.

They are responsible for finding a range of self-catering accommodation for asylum seekers who are dispersed across the country, and for sub-contracting hotels for tens of thousands of migrants coming across the Channel by small boat.

This is a breaking story. More to follow.