The Bibby Stockholm, the controversial barge that has been used to accommodate asylum seekers, is to be shut down, the government has said. Use of the vessel, which is housing 400 people and is moored at Portland, Dorset, will stop when the current contract ends in January 2025. The Home Office said in an announcement that ending the use of the Bibby Stockholm formed part of an expected £7.7bn of savings in asylum costs over the next 10 years. Extending its use would have cost more than £20m next year, according to the department. However, a Downing Street spokesperson said on Tuesday they could not specify where those on the barge would go in January, and would not rule out sending them to hotels. They said: “Decisions will be made on a case-by-case basis, and will be made working closely with local authorities.” The large vessel became an emblem of the last government’s approach to migration. Last year Leonard Farruku, a musician who was seeking asylum after travelling from Albania, is thought to have killed himself on the barge. The minister for border security and asylum, Angela Eagle, said on Tuesday: “We are determined to restore order to the asylum system so that it operates swiftly, firmly and fairly, and ensures the rules are properly enforced. The home secretary has set out plans to start clearing the asylum backlog and making savings on accommodation which is running up vast bills for the taxpayer.” Farruku’s sisters, Jola Dushku and Marsida Keci, said: “We welcome the Home Office’s decision to close the Bibby Stockholm barge in January 2025. Our hearts are full of pain since Leonard’s death and we do not want anyone else to go through what Leonard went through. “We don’t understand why this decision was not made straight after Leonard’s death, however, as clearly the barge was not a safe place for him and many others. “The Home Office say they are closing the barge because it is costing too much money, but what about the mental health and the safety of the residents who still live there now?” The barge became part of the Home Office’s estate in the summer of last year as a means of cutting the hotel costs of housing asylum seekers. But it was blighted by problems since docking in Portland. The Fire Brigades Union said it was a “potential deathtrap” because of possible overcrowding and a lack of suitable fire exits. Home Office contractors were also told that potentially deadly legionella bacteria had been detected on the Bibby Stockholm hours after asylum seekers were taken onboard on 7 August. This was publicly confirmed by the Home Office days later and officials evacuated all 39 people from the vessel that day. People were returned in October, but calls for its closure grew louder again after the death of Farruku, 27, in December. The decision not to renew the contract came after Monday’s announcement by the home secretary, Yvette Cooper, of plans to “clear” the backlog of asylum claims and save billions of pounds. Lloyd Hatton, who was elected as the Labour MP for South Dorset in this month’s election, said that he had held discussions with Eagle, and it was made clear that the Home Office now agreed the barge was “an unworkable, expensive and ineffective gimmick”. “Many of the men on the barge who I have met have been waiting months if not years for their cases to be processed. A decision will be made between now and January as to whether the men will remain here and contribute or be returned in some cases.” However, while the announcement was welcomed by charities, some drew attention to the ongoing legal action to try to block the use of former RAF bases as accommodation for asylum seekers. Imran Hussain, executive director of external affairs at the Refugee Council, said: “Clearing the backlog of asylum decisions reduces the numbers of people in the system who need to be accommodated. And ending the use of the Bibby Stockholm, and barges and hotels more generally, will make hugely important savings that help the government fix the asylum system.”