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  1. Politics
1 March 2024

The batsh*t economics of the Rwanda plan

One year’s deportation bill could cost considerably more than the UK spends on its entire prison system.

By Will Dunn

A new report published this morning by the National Audit Office (NAO) looks at the costs of the government’s plan to process asylum claims in Rwanda. Whether or not you agree with the Home Secretary’s assessment of the plan (which he reportedly described as “batshit”), the government’s justification for it is that the asylum system in the UK has become very expensive, at around £4bn a year, and that offshore processing is cheaper. The NAO report shows that for the plan to work as intended, it could cost billions.

As an example, we can now use the NAO report to say how much it would cost to relocate the 539 people who crossed the English Channel last week, in a total of ten small boats, to gain entry to the UK.

To send these people to Rwanda, the NAO says the government would need to pay Rwanda’s Economic Transformation and Integration Fund (ETIF) £170,874 per person (£20,000 up front, plus £45,262 for the first year and gradually reducing payments for the next four years), which brings the cost for one week’s arrivals to just over £92m.

The UK has paid £20m of these costs up front, but we have also committed to paying an extra £120m, on top of the £370m already committed to the ETIF as part of the agreement between the UK and Rwanda, once 300 people have been deported.

This, however, is just the money we’re giving to Rwanda to accept us deporting people to their country. There is also a new infrastructure of planes (which might need to be specially chartered for security reasons), escorts (people to make sure the asylum seekers don’t run away) and administrators to pay for. The Home Office has estimated this will cost £23.5m by the end of this financial year, with an extra £12.5m next year and then about £2m per year from then on, plus £11,000 per person for flights. That is before the additional costs of building more immigration removal centres – which can cost over £100m each, plus service costs of around £100 per person per day – and legal costs, which could spiral as more people challenge the process.

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This means that to deport the people who came to England on small boats last week, it would cost more than £611m.

However, the central idea of the Rwanda policy is that only a small number of people will need to be relocated. If deporting 500 people was enough to persuade tens of thousands of other people to claim asylum in other countries, for years to come, it would make economic sense: it would reduce the number of asylum seekers, who are typically a net fiscal cost to an economy, and the cost of the asylum system, which is very large and rising.

However, this is a policy targeted at people who have already taken the extreme personal risk of being driven across the sea by organised criminals. It does not make sense to argue that a one per cent chance of being sent to another country is going to deter them from trying to come to the UK.

Peter Walsh, senior researcher at the Migration Observatory at Oxford University, agrees that “everything hinges on the probability of being sent to Rwanda”, and that people would need to face “a very substantial chance” of being sent to Rwanda for it to be a real deterrent.

Let’s say a 50 per cent chance of being relocated is enough to deter large volumes of asylum seekers. In the year to June 2023, 97,390 people sought asylum in the UK; to send half those people to Rwanda at a cost of £181,874 each would cost £8.86bn, not including the cost of building and servicing new detention centres or legal costs. This is considerably more than we spend on our entire prison system.           

This would be transformative for Rwanda, which in 2021 collected tax revenue of 1.9trn Rwandan francs (£1.2bn) according to the OECD. ETIF payments of £8.3bn would make the UK by far the biggest contributor to a booming Rwandan economy, in which the main industry was processing asylum claims.

This isn’t to say that processing very large numbers of asylum claims in the UK is affordable. The most recent impact assessment, for the illegal migration act, put the cost at £106,000 over four years; the Rwanda plan therefore involves spending about an extra £76,000 per application. Very roughly, it means doubling the cost of the asylum system now in the hope that we will halve the number of asylum seekers in future.

But as Walsh points out, the assumptions made here are for a plan that runs smoothly: “The idea is that the government would be able to remove individuals to Rwanda within 28 days. But it’s not clear that that would happen in every case, and it could you can easily envision a scenario should take substantially longer. So much depends on the capacity of Rwanda to be able to receive large numbers of irregular entries to the UK. There’s a lot of moving parts, a lot of uncertainty.” In that uncertainty, even more costs will arise.

[See also: The Tories have become the Conspiracy Party]


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