LONDON -- The contract for the Bibby Stockholm barge, which has been used by the previous Conservative-led government to house asylum seekers off the coast of Dorset in southwestern England, will not be renewed from the end of January 2025 as part of the Labour government's overhaul of the asylum system.

"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," said the Minister for Border Security and Asylum Angela Eagle 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," she added.

Ending the use of the Bibby Stockholm forms part of the expected 7.7 billion pounds ($9.94 billion) of savings in asylum costs over the next 10 years, the Home Office claimed.

The three-storey barge to house asylum seekers began to be put into use in August 2023, despite opposition from lawmakers and human rights groups. Subsequent tests on the barge confirmed the presence of a deadly strain of legionella bacteria in its water system.

The Labour government has vowed to overhaul the asylum system. Prime Minister Keir Starmer scrapped the Tory government's controversial Rwanda Scheme of deporting asylum-seekers to Rwanda immediately after he assumed office. He is also working on setting up a new Border Security Command to "smash the gangs" that have been fueling the illegal crossings of the English Channel.