Rachel Reeves has told MPs that asylum hotel use will end by the end of this Parliament.

Delivering her Spending Review to the Commons, the Chancellor said the move will save taxpayers around £1billion a year. It comes after years of chaos under the Tories saw numbers swell, with over 30,000 asylum seekers living in hotels in March.

Ms Reeves also announced funding of up to £280million for the UK's border security command - the organisation charged with stopping small boat crossings.

It comes after Spending Review negotiations went down to the wire with Home Secretary Yvette Cooper. She was the last Cabinet minister to agree a settlement with the Chancellor, having only confirmed a deal on Monday.

In an attack on the Conservative legacy, Ms Reeves told MPs: "The party opposite left behind a broken system: billions of pounds of taxpayers' money spent on housing asylum seekers in hotels, leaving people in limbo and shunting the cost of failure onto local communities. We won't let that stand."

She continued: "So I can confirm today that, led by the work of ... the Home Secretary, we will be ending the costly use of hotels to house asylum seekers in this Parliament. Funding that I have provided today, including from the Transformation Fund, will cut the asylum backlog, hear more appeal cases, and return people who have no right to be here, saving the taxpayer £1billion per year."

Ms Reeves also said: "To support the integrity of our borders I can announce that funding of up to £280million more per year by the end of the spending review for our new border security command."

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Following the announcement that asylum hotels will close, Enver Solomon, chief executive of the Refugee Council, said: “Asylum hotels have become a flashpoint for community tensions and cost billions to the taxpayer, so ending their use is good for refugees, the taxpayer and communities. The deadline of 2029 feels far away, and we urge government to make it happen before then.

"We need to see the men, women and children who arrive in Britain in search of safety being housed within our communities, not isolated in remote hotels. Not only is this far cheaper but it also means that people can actually integrate into British life, contribute, and play their part in our country."

The Spending Review sets departments' budgets for future years. This year's review will set out detailed plans for day-to-day spending over the next three years and for capital budgets for the next five years.

Opening her review in the Commons, Ms Reeves said the tax hikes and looser borrowing rules of the Autumn Budget has allowed her to spend £190billion more on the day-to-day running of public services and £113billion on investment.

She told MPs said "we are renewing Britain" as she set out how she plans to spend hundreds of billions of pounds of taxpayers' money. The Chancellor said total departmental budgets would grow by 2.3% a year in real terms.

Prime Minister Keir Starmer told the Cabinet that the spending review "marks the end of the first phase of this Government, as we move to a new phase that delivers on the promise of change for working people all around the country and invests in Britain's renewal".