Major UK city in £110m crisis as 'generous' migrant plan backfires spectacularly

A major UK city has been warned of a £110million black hole in the local authority's coffers, driven largely by the cost of housing asylum seekers. Robert Emmott, executive director of financial services, will present the forecast to councillors at the Glasgow City Chambers meeting on Thursday. He warns that savings of at least 12% will be required, which would mean further job losses and cuts to services.

Emmott concludes: "The latest projections forecast a budget gap of £109.7m for 2026-28, before any Council Tax increase with £65.7m of this relating to pressures associated with homelessness." The SNP-run council has asked the Home Office for a pause in dispersal of new arrivals to the city from October, and also an end to the requirement to house asylum seekers moving to Glasgow from elsewhere in the UK.

This has infuriated campaigners, including the Scottish Refugee Council, whose chief executive has warned this "would do more harm than good, and potentially lead to a rise in people sleeping on the streets".

Mr Emmott's report states that in 2024/25, the "overspend on homelessness, from those granted leave to remain" was £27m, although £12.4m of this was paid from the council's cash reserves "leading to a net cost... of £14.6m".

He continues: "Unless there is a change in policy, projections are that this will rise to £43m in 2025/26 and £66m in 2026/27. It is estimated that around 56% of the applications from those granted leave to stay in 2025/26 will arise from individuals granted leave to remain whilst in Glasgow, with the balance due to applicants choosing to settle in Glasgow from other parts of the UK outwith Scotland."

Overall, this means bill for this current year and the next financial year is £109m. Even if the council's request for a pause in new asylum seekers is granted, the bill for this year and next is still projected to come to £49m.

The report goes on: "A pause in both dispersal to Glasgow and the requirement to house applicants from outwith Scotland would, if implemented from October 2025, reduce estimated costs to £36m in 2025/26 and then to £13m in 2026/27."

However, there is no guarantee the UK Government will agree to the pause, especially given the huge increase in asylum claims from small boat crossings and the protests over housing asylum seekers in hotels seen in England.

Mr Emmott says that a 5% council tax increase in both years (2026/27 and 2027/28) would reduce the budget black hole to £80.7m and "reduce the savings required to 7.2% or 11.8% if teachers' budgets are protected." Inflation and increased pension payments are the other major factors in the forecast spending gap.

Council leader Susan Aitken called for the system to be "transformed".

She told the Herald newspaper: "There has been a huge rise in the number of households that have gone through the asylum process elsewhere in the UK, only to find themselves homeless.

"Increasingly these new citizens are then drawn to Scotland and Glasgow by dint of the fact our homeless legislation is more robust than what is in place across the rest of the UK.

"I am proud of Glasgow's record in supporting refugees and I believe that migration has enhanced its 850-year story. However, the support the city gets from Whitehall must be transformed."

Councillor Thomas Kerr from Reform UK told the Scottish Express: "Glasgow is at breaking point - we're skint and our young people can't get a house, we can't afford the SNP and Labour's open door immigration policies anymore. It's time to invest in our own and stop using our city as a dumping ground."

Elsewhere in the papers, a report by the council's deputy leader and city treasurer Richard Bell reveals the £43m bill for housing asylum seekers in 2025/26 will "fully extinguish" the local authority's budget support fund.

He writes: "Actions to address this in 2026-27 are currently being considered; however, these need to be urgently progressed to minimise the need for significant savings in 2026-27 to address this pressure."

The 'rainy day' budget support fund was never intended to be used to meet running costs and Cllr Bell previously said it had been set up "in order to allow us to look at how we can do things differently".

Council budget savings in recent years have already resulted in major job losses and services and facilities axed across the city. These include a supported living service for the elderly - including people with dementia - and a counselling service for sexual assault victims at the Sandyford clinic.

The request for a pause in asylum seekers was announced back in April by Glasgow's homelessness convenor, Cllr Allan Casey. He warned the system risks "damaging social cohesion" and said "the current cost to the city is running into the tens of millions, with no end in sight".

In a letter to Labour asylum minister Angela Eagle he said more than 4,000 asylum seekers were being housed in Glasgow, including more than 1,000 who had travelled from elsewhere in the UK, often cities such as Belfast, London, Manchester and Birmingham.

They are attracted by the generous housing options funded by the council and the extra benefits provided by the Scottish Government. For years, the city has been the largest asylum dispersal area outside London, with most of Scotland's 32 councils not taking any asylum seekers at all.