The uncertain financial implications of the UK’s Rwanda policy

by Peter William Walsh and Madeleine Sumption

An earlier version of this analysis was submitted as evidence to the UK Parliament’s Public Accounts Committee inquiry on Asylum accommodation and Rwanda.

This commentary examines how much the UK government spent on its Rwanda policy before it was cancelled and what its financial impacts might have been had it proceeded.

Background

On 14 April 2022, the UK’s then Conservative government announced that it was going to send certain people seeking asylum in the UK to the Republic of Rwanda, where the Rwandan government would decide their asylum claims. The policy aimed to address increasing numbers of people reaching the UK without authorisation by crossing the English Channel in small boats.

After winning the UK’s 2024 general election and forming the new government, the Labour Party cancelled the Rwanda scheme.

For more information on the Rwanda scheme, see our Q&A: The UK’s former policy to send asylum seekers to Rwanda.

How much was spent on the Rwanda policy?

On 4 December 2024, the Labour government published a breakdown of the Home Office’s spend on the Rwanda scheme until June 2024. The breakdown also includes the financial cost of the Illegal Migration Act 2023, under which the government paused the processing of asylum claims for those who arrived in the UK without authorisation, with a view to detaining them before their removal to Rwanda. This implied additional costs associated with expanding detention capacity.

The total financial cost up to June 2024 was estimated to be £715 million (Table 1):

Table 1

Home Office spend (£ million) on the Rwanda scheme and Illegal Migration Act 2023

Total				715
		Financial year
	2022–2023	2023–2024	Jan–Jun 2024	Total
Payments to Rwanda	140	100	50	290
Flights, escorting, airfield and impacted police force	0	30	20	50
Fixed detention and reception centre investment	0	85	10	95
Other fixed costs	0	235	45	280

Source: Home Office Transparency Data, Breakdown of Home Office costs associated with the MEDP with Rwanda and the Illegal Migration Act 2023.
Notes: Figures to nearest £5 million. Financial years from 6 April to 5 April of the following year.

How much would the Rwanda scheme have cost had it proceeded?

Due to the Rwanda partnership ending, £220 million in scheduled future payments to Rwanda will not have to be made. These scheduled payments would have included:

• £50 million in April 2025;
• £50 million in April 2026, and
• £120 million after the first 300 individuals had been relocated.

Had the policy proceeded, would the money have been saved long-term? The Conservative government, which introduced the policy, said that saving money long-term was an important goal of the Rwanda policy. Government statements about the policy typically pointed to the costs of the UK asylum system. They suggested that a policy that deters people from coming to the UK and claiming asylum would make the system more sustainable. However, the government’s claim that it would save money was subject to several assumptions, all of which were unknown.

This commentary outlines four unknowns that would have substantially influenced the finances of the Rwanda policy and, hence, an assessment of its value for money:

• The deterrent effect. The policy’s financial impact would have hinged on whether it dissuaded people from coming to the UK without authorisation, such as by small boat. The number of people likely to be deterred by such a policy cannot be known in advance. Evidence from other countries suggests deterrent effects are typically small, although none of this evidence specifically concerns the effect of a large-scale relocation policy like the Rwanda scheme, because no examples of such a policy exist.
• The number of people relocated. If more people were relocated, this would have pushed up the scheme’s costs in the short run but may also have increased any deterrent effect in the longer run.
• The departure rate from Rwanda. If a person relocated to Rwanda left the east African country, the UK would have stopped its per-person payments to Rwanda and paid £10,000 to facilitate the person’s voluntary departure. As a result, if more relocated people left Rwanda, the cost of the policy would be lower.
• The financial implications of the status quo. If the government were to have succeeded in making the UK’s asylum system more efficient, it would have weakened the economic rationale for the Rwanda policy.

We do not consider the wider costs of the Illegal Migration Act (IMA). That includes the cost of supporting people who would have arrived in the UK despite any deterrent effect but who could not be removed to Rwanda or another country. These costs could have been considerable if the Rwanda policy would not have had its intended deterrent effect, as we explain in the Migration Observatory analysis, Why the government’s economic impact assessment of the Illegal Migration Act tells us little about the Act’s economic impact.

We also do not consider costs to individual asylum seekers, which a full social cost-benefit analysis would include.

Under the Rwanda deal, the UK government provided fixed-cost development funding to Rwanda, as well as per-person development payments, and per-person processing and integration costs (Table 2).

According to an investigation by the National Audit Office (NAO), the development funding would have comprised a fixed cost of £370 million, plus an additional £120 million once 300 people had been relocated to Rwanda. Nobody had been sent to Rwanda by the time the policy was cancelled. An additional £20,000 was due to be paid to the development fund for each person relocated.

In addition to payments into Rwanda’s development fund, the Home Office would have sent per-person payments to Rwanda to cover asylum processing, operational costs, and an integration package for each relocated person. The integration package included accommodation, food, education, language training, and professional development. These payments would have lasted up to five years and totalled £150,874 per person.

The NAO’s report did not include wider costs of implementing the Illegal Migration Act, such as providing additional detention capacity to hold people before they are relocated.

Table 2

Summary of the Rwanda policy’s financial implications

Cost category	Cost (£)
Development fund fixed payments	£370 million to 2026 (comprising £220 million sent to Rwanda as of Feb 2024, plus £50 million each year in 2024, 2025, and 2026) £120 million once 300 people have been relocated to Rwanda
Development fund per-person payments	£20,000 per relocated person
Per-person asylum processing, operational, and integration payments	£150,874, paid quarterly, over five years: Year 1: £45,262 (includes £11,000 for asylum assessment) Year 2: £37,718 Year 3: £30,175 Year 4: £22,632 Year 5: £15,087 If a relocated person decides to leave Rwanda, the UK would stop the above payments and pay Rwanda a one-off payment of £10,000 to facilitate the individual’s voluntary departure. £100 per year, up to £500 in total for healthcare
Direct Home Office costs (as at February 2024)	£2 million direct staff costs £2.3 million in Home Office legal fees £15.3 million in set-up costs for escorting people to Rwanda (estimated to reach £23.5 million by the end of 2023-24)
Estimated future direct Home Office costs	£1 million per year in staff costs £11,000 per person for flights to Rwanda £12.6 million to train escorts in 2024-25 £1 million per year after 2024-25 in escorting costs £Unknown in legal fees
Wider costs	£Unknown: Implementing the Illegal Migration Act, e.g., cost of providing sufficient detention facilities to hold people before they are relocated.
Estimated total costs (assuming 10% departure rate from Rwanda)	100 people relocated: £434 million 200 people relocated: £452 million 300 people relocated: £590 million 500 people relocated: £625 million 1,000 people relocated: £714 million 5,000 people relocated: £1.4 billion 10,000 people relocated: £2.3 billion 20,000 people relocated: £4.1 billion 30,000 people relocated: £5.9 billion 50,000 people relocated: £9.4 billion

Source: Migration Observatory analysis of National Audit Office (2024), Investigation into the costs of the UK-Rwanda Partnership.
Notes: Rwanda’s development fund was called the Economic Transformation and Integration Fund (ETIF) and was designed to support economic growth in Rwanda. ‘Estimated total costs’ is highly uncertain and includes the £370 million fixed-cost payment to Rwanda’s development fund up to 2026-27, £120 million paid if 300 people had been relocated to Rwanda, known direct Home Office costs as of February 2024, estimated future direct Home Office costs for the remainder of the Partnership, per-person development fund payments of £20,000, per-person operational and healthcare payments, and per-person flight costs. It assumes, following the National Audit Office, that 10% of people relocated to Rwanda would have departed over the five-year period, based on a quarterly departure rate of around 0.5%. The estimated total cost excludes legal fees beyond February 2024, the per-person costs of providing escorts to relocate individuals, which would have depended on the number of flights required, and the wider costs of implementing the Illegal Migration Act, such as expanding detention capacity.

Figure 1

Unknown 1: The deterrent effect of the Rwanda plan

The total financial effect of the Rwanda policy would have depended fundamentally upon how many people it deterred from entering the UK without permission. This is because sending asylum seekers to Rwanda would have been more expensive than keeping them in the UK, according to the Home Office. However, if enough people had been deterred from coming to the UK to claim asylum, the government would have saved the resources it would otherwise have spent on them.

It is not possible to know what the Rwanda policy’s deterrent effect would have been, especially without information about the number of people who might have been removed. Neither the Impact Assessment for the Illegal Migration Act nor the National Audit Office’s investigation attempted to estimate the deterrent effect. Studies on asylum policies in other countries have typically found that the deterrent effects are small because:

• Policy is not the most important factor driving changes in the number of people claiming asylum. Global developments, such as conflicts in countries of origin, appear statistically to be more important.
• Prospective asylum seekers do not always know what policies will face them when they arrive. The information they have may be inaccurate or misleading and not particularly detailed.
• Decisions about where and how to move depend not just on policy. Many other factors, such as the presence of family members or the language in the countries of destination, also play a role.

While there are examples of countries that have seen much larger reductions in maritime arrivals, such as Australia, those cases usually involved physical enforcement activities, such as boat interceptions and pushbacks, in addition to policies designed to affect asylum seekers’ decisions. Evidence on the impacts of asylum deterrence policy is summarised in the Migration Observatory’s report, UK policies to deter people from claiming asylum.

In practice, the deterrent effect of the Rwanda policy may well have depended on how many people would have been removed there. If the number were relatively small (up to a few per cent of newly arriving asylum seekers), the evidence from other countries suggests the deterrent effect may also have been small. If the number were very large (i.e., a substantial majority of all asylum seekers), it is reasonable to assume a bigger deterrent effect. The international evidence showing small deterrent effects is largely based on less radical policies, such as restricting access to benefits for asylum seekers, and would be less directly relevant to a policy that sent a large majority of asylum seekers to another country.

Unknown 2: The number of people who would have been relocated to Rwanda

The main known cost of the Rwanda policy was the cost of removing people to Rwanda. This includes the per-person payments made to the Rwandan government and future payments scheduled, plus other associated costs such as those relating to logistics and administrative and legal costs. The NAO estimated that the marginal per-person cost of sending someone to Rwanda would have been around £182,000 (including operational and healthcare payments, the per-person development fund payment, and per-person costs for flights (estimated at £11,000 for chartering and fuel, but excluding per-person escorting costs). The average cost per person would have been higher because the scheme has fixed costs, including lump-sum payments to Rwanda and possibly the expansion of detention facilities in the UK.

Given that the number of people sent to Rwanda would have crucially affected the finances of the programme and its likely impacts, it is notable that the Conservative government were vague about the numbers intended. Available information from public statements suggests the number could be anywhere between a few hundred and tens of thousands of people.

The uncertainty about the number of people who could have been relocated means there were radically different scenarios for the scheme’s finances. For example, in one plausible scenario, the UK would have spent roughly £600 million to remove 300 people,^[i] with limited deterrent effect, although the precise costs are highly uncertain. This would be a cost of around £2 million per relocated person.

In another scenario, the UK would have initially sent tens of thousands of people to Rwanda at a much higher cost. It could have cost roughly £4 billion to relocate 20,000 asylum seekers^[ii] – a cost of around £200,000 per person – plus the additional costs of expanding detention facilities. In this scenario, however, the UK may have spent less in subsequent years if fewer asylum seekers came to the UK due to a larger deterrent effect. Some people would still have been removed to Rwanda in the subsequent years, but not as many. It is not clear whether this latter scenario is plausible because it requires such a large initial outlay, high capacity in Rwanda, and the legal and operational ability to remove asylum seekers. If it would have happened, the overall financial impact of the scheme would have depended on how many years it lasted. This is because the costs would be front-loaded. A key factor in the long-term impact would thus have been whether Rwanda was willing to negotiate an extension of the scheme and at what cost.

In practice, the number of people who would have been relocated to Rwanda would have depended on several factors, including:

• The capacity of Rwanda to process asylum applications.
• Capacity in the UK to detain asylum seekers and arrange their removal.
• Legal challenges delaying or preventing removal, potentially including appeals made to the European Court of Human Rights.
• Accommodation capacity in Rwanda. This may depend in part on how many people stay in Rwanda as opposed to leaving shortly after arrival.

All of these factors were highly uncertain.

The total number of people who could potentially have been sent to Rwanda is also not known. This number is relevant as it would have affected the potential maximum size of the scheme (and thus its costs), as well as the share of people who would have potentially been subject to the policy and removed. The maximum number of people who would have potentially been liable for removal to Rwanda would have depended on factors such as:

• The number of people detected arriving in the UK through unauthorised routes. If the Illegal Migration Act had been implemented fully, the Home Secretary would have been obliged to remove all adults who arrived without authorisation in the UK on or after 20 July 2023. Of these, some could have been removed to their country of nationality because the Home Office views these countries as safe. These safe countries currently include the EEA (the 27 EU countries plus Iceland, Liechtenstein, and Norway), Switzerland, Albania, India, and Georgia. Currently, unauthorised entrants of all other nationalities could be removed only to Rwanda. There are currently no precise estimates of how big this group is. Home Office statistics showed that as of April 2024, around 52,000 asylum claims were submitted since the enactment of the IMA on 20 July 2023. Most of these claimants would have been eligible for removal to Rwanda. For more analysis on how many asylum seekers the Conservative government would have needed to send to Rwanda, see our commentary, How many people need to be sent to Rwanda or have their asylum claim processed under the next government?
• The number of people who accept voluntary return to their own country or move on to another country. In 2023, over 19,000 people who were liable for removal left the UK voluntarily, with over half going to Albania (3,000), India (2,800), Brazil (2,200), China (1,000), and Turkey (900). There were few voluntary returns to many of the top countries of nationality for asylum seekers, such as Afghanistan or Iran.
• Implementation decisions. For example, the government could have removed to Rwanda unauthorised migrants who have not claimed asylum but may choose to focus on those who have claimed asylum.

Beyond the fixed and per-person costs, the Home Office would have faced certain additional costs if the number of people removed to Rwanda were relatively large. In particular, the Illegal Migration Act 2023 (IMA) extends powers to detain people ahead of removal. Current policy enables the government to detain people ahead of removal if there is reason to believe they will abscond, although there are not sufficient data to establish the likely prevalence of absconding among people eligible for removal to Rwanda.

In mid-2024, the UK had around 500 free detention spaces. The previous government planned to increase its detention capacity, although it is not clear what total capacity would have been required. The Home Office under the Conservative government did not provide enough detail about how it planned to implement detention policies under the IMA and Rwanda scheme to assess the likely costs of detention resulting from either policy measure.

Building new detention capacity has substantial up-front costs, and holding people in detention is more expensive than housing them in regular accommodation. The IMA Impact Assessment assumed a cost of £85 per day to support someone in regular asylum accommodation, while in Q4 2023, the cost of holding someone in immigration detention was estimated at around £116 per day.

Unknown 3: The departure rate of relocated people – and how long they stay in Rwanda

The cost of relocating a person to Rwanda would also have depended on how long the person remained in Rwanda. If a person left Rwanda within five years, the UK government would have stopped its operational payments (up to around £151,000 per person, made quarterly), and pay Rwanda £10,000 to assist in the person’s voluntary departure.

This means that the payments to Rwanda would have depended heavily on how many relocated people remained in Rwanda and for how long.

If a relocated person left immediately, the UK government would have paid around £41,000 (the £20,000 per-person payment to Rwanda’s development fund, plus £11,315.50 (the first-year payment of £45,262 divided by 4 to give the quarterly payment], plus £10,000 to facilitate voluntary return). If they had stayed at least five years, the UK would have paid around £171,000 in per-person payments – around four times more. The longer a person would have stayed in Rwanda, the greater the per-person payments would have been (Figure 2).

Figure 2

The NAO report states that the Home Office’s “working assumption” on the departure rate was that 10% of people who are relocated to Rwanda would have left voluntarily (presumably within five years of arrival).

However, this ‘departure rate’ is highly uncertain. Evidence^[iii],^[iv] on Israel’s similar policy of sending Eritrean and Sudanese people to Rwanda suggests a much higher departure rate, which would reduce the total cost of the scheme.

Unknown 4: the financial implications of the status quo

The fiscal impact of the Rwanda scheme would have depended on the financial cost of the system it replaced. The more it costs to process and support asylum seekers in the UK, the greater the savings from removing those people to Rwanda instead. By contrast, if the government had made the asylum system more efficient, the economic rationale for the Rwanda policy would have been weakened.

Before the implementation of the Illegal Migration Act, there were two main costs associated with asylum. First, the cost of supporting refugees in the UK after their claims are accepted. Research on the fiscal impact of refugees is limited, but it is likely that over the course of their lifetimes, refugees require net fiscal support because they tend to have lower employment rates and often struggle to find well-paid work. If the Rwanda policy does have a deterrent effect, the costs of supporting refugees in the UK would be lower. For more detail, see our commentary on the IMA Impact Assessment.

Second is the financial cost of the UK’s asylum system. This cost has increased sharply in recent years, from £733 million in the financial year 2018/19 to around £4 billion in 2022/23. This increase is due primarily to the large backlog of unprocessed claims, which has meant that many more people have needed to be housed and supported financially by the government. As the backlog falls, costs can be expected to decline.

However, the future costs of the backlog and the UK asylum system more broadly are uncertain. Some of this uncertainty results from the unpredictable nature of asylum migration, which is not possible to forecast accurately.

Additional uncertainty would have come from the Illegal Migration Act. If the IMA had created a large cohort of people who could not be granted or refused asylum and who also could not be removed from the UK (see above), the government could have incurred high costs over time. Some of these costs would have fallen to central government, which is expected to provide accommodation and support to destitute asylum seekers who do not have a decision on their claim. Other costs would have fallen to local government—for example, if people had left the asylum support system and become unauthorised migrants in the UK. Either way, it is possible that the IMA would have improved the fiscal impact of the Rwanda policy by pushing up the cost of the UK’s asylum system.

Conclusion

This analysis has highlighted four factors that could have substantially influenced the cost of the Rwanda policy: its uncertain deterrent effect, the number of people relocated, how long people remained in Rwanda, and the costs of the UK’s asylum system without the Rwanda scheme.

The influence of these factors on the cost of the Rwanda policy, had it been fully implemented, is unknown. In large part, this is because they are highly uncertain and cannot be forecast with precision. However, the Conservative government could have provided more information about its plans, which would have made possible broad estimates of costs to be calculated. For example, the government could have provided its working assumptions for the number of people it would have sent to Rwanda under different scenarios, as well as the number of people it envisaged detaining before their removal and for how long.

References

[i] This should be viewed as a highly uncertain estimate and includes the £370 million fixed-cost payment to Rwanda’s development fund up to 2026-27, £120 million paid once 300 people have been relocated to Rwanda, known direct Home Office costs as at February 2024, estimated future direct Home Office costs for a five-year period, £6 million in per-person development fund payments (£20,000 x 300), £55 million in per-person operational and healthcare payments, and flights estimated at £11,000 per person, which includes costs for chartering and fuel but not escorts. The estimate also assumes that 10% of people relocated people depart Rwanda over the five-year period (based on a quarterly departure rate of around 0.5%). The estimate excludes unknown legal fees after February 2024 and the costs of providing escorts to relocate individuals, which depend on the number of flights required.

[ii] The IPPR’s figure assumes 10% voluntarily depart Rwanda over the five-year period and includes the £370 million fixed-cost payment to Rwanda’s development fund, plus £120 million once 300 people have been relocated to Rwanda, plus £400 million in per-person development fund payments (£20,000 x 20,000), plus per-person operational and healthcare payments.

[iii] Shoham, S., Bolzman, L. and Birger, L. (2018). Moving under Threats: The Treacherous Journeys of Refugees who ‘Voluntary’ Departed from Israel to Rwanda and Uganda and Reached Europe. Available at: https://www.law.ox.ac.uk/research-subject-groups/centre-criminology/centreborder-criminologies/blog/2018/10/moving-under

[iv] Birger ,L., Shoham, S. and Bolzman, L. (2018). “Better a prison in Israel than dying on the way”: Testimonies of refugees who “voluntarily” departed Israel to Rwanda and Uganda and gained protection in Europe. https://doi.org/10.18452/20087