Migrant hotels are costing taxpayers a “crazy amount of money”, Kemi Badenoch has warned.

The Conservative leader, reacting to the Daily Express’s revelations that a single asylum seeker costs £54,020 every year, warned Labour has “no plan” to end the Channel small boats crisis.

Mrs Badenoch accused Sir Keir Starmer of “messing around with old ideas” and plans that had already been dismissed.

She said: “[It’s a] crazy amount of money. Keir Starmer hasn’t got a grip, and illegal crossings are up since the Conservatives left office.

“We did not leave with a good record on immigration.

“That’s something that I have acknowledged. I’ve come up with new policies like changing that quick conveyor belt to British citizenship and indefinite leave to remain.

“That needs to change.

“But he said that he was going to smash the gangs. No gangs have been smashed.

“There’s no plan to do it, so he’s just messing around with old ideas which we either tried or which we knew wouldn’t work. And I’m very worried that the problem is going to get a lot worse before it gets better.”

The CIH urged ministers to consider giving councils one-off grants to buy houses to move migrants out of hotels.

The industry body said people would be able to share the homes, drastically reducing the cost to the taxpayer.

Setting out the economic case, CIH told the Home Affairs Select Committee the “average cost per person for hotel accommodation is £54,020”.

They added: “In comparison, accommodating three people in a three-bedroom house saves on average £150,395 per annum (the difference between the cost of a hotel and the rent for a three-bed house at average local housing allowance rates)”.

But the move would be hugely controversial amid a housing crisis in the UK.

The Local Government Association has warned of “increased demand and the acute shortage of housing”, potentially pushing prices up even higher for families struggling to get their own home.

And Tory MP Neil O’Brien, who has warned of the impact of immigration on housing, said: “With illegal crossings on the small boats up by a quarter under Starmer, local communities are struggling under the pressure.

“Migration on this scale obviously makes it more difficult for people to get housing, but on the other hand a lot of British people will feel it is unfair that people who have just arrived should get housed having paid in nothing while people who shave worked and paid in for a long time lose out.

“People who are struggling and saving to try and get on the housing ladder will rightly feel this is unfair.”

Reform UK MP Lee Anderson added: “This proposal is a slap to the face of the young people in Britain that are working hard and saving to get their foot on the housing ladder.

“Now they’re being told that migrants could be given priority for housing, despite them never having paid a penny in tax.

“By detaining and deporting all those who arrive here illegally we can drastically reduce the need of asylum accommodation altogether, end the use of hotels and save taxpayers millions in the process.”

The CIH said the Home Office had been too slow to act to reduce the hotel crisis.

They said: “When we initially made these calculations in summer 2023, 48,000 people seeking asylum were staying in hotels, requiring the procurement of 16,000 homes to replace entirely.

“Procuring homes takes time – but if we had begun purchasing homes then each home procured would have already repaid the capital grant needed to fund its purchase, and each home procured would now be saving over £150,000 per annum off the current hotel bill.

“If 2,000 homes had been procured during the last year this would now be reducing costs by £300m this year.

“As the determination of asylum claims has quickened, the number of asylum seekers in hotels has fallen to just under 36,000 (September 2024).

“If 16,000 homes had been purchased in 2023, 12,000 would still be in use in the asylum system.”

The CIH warned using hotels is “cripplingly expensive”, adding councils are also spending £1.7 billion on temporary accommodation.

More than 38,000 migrants are staying in hotel rooms, costing £5.5 million a day. A further 65,707 are in other accommodation.

Putting someone in a hotel room costs £145 per night, compared with £14 for accommodation such as houses, bedsits and flats, the National Audit Office said.

Defending the proposal, John Perry, policy advisor at the Chartered Institute of Housing (CIH), said: “This government (like the previous one) is keen to cut the costs of accommodating asylum seekers.

“Buying houses to do this would be cheaper than using hotels. If local authorities bought the houses, they could later be used for homeless families once the current backlog of asylum cases has been cleared, which the government is doing.

“This move would save money and – very soon – provide better accommodation for families who are homeless, many living in hotels.”

Asked about aid and asylum hotels, Sir Keir Starmer said: “I’m absolutely determined to get the hotel bill down wherever it falls, and it shouldn’t be falling where it falls at the moment.

“I’m not going to make a commitment to what pathway we’re going to take to get aid spending back up again but that’s what I’m going to tell you… that is where we want to get back to but I don’t want to wait until we get to that point, I want to act now to find other ways of doing what we want to do on aid.”