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Home Office Under Pressure To Disclose If Asylum Seeker Housing Profit Cap Has Been Triggered

The Home Office (Alamy)

3 min read

MPs and human rights groups are placing increased pressure on the Home Office to be more transparent about whether companies to whom asylum seeker housing is outsourced have triggered a profit cap intended to curb the amount private businesses can make from government contracts.

Asylum accommodation in the UK is managed by three private companies – Serco, Mears and Clearsprings – in a contract agreed in 2019. The government inserted a specific clause outlining a profit cap for these companies, and any excess would have to be returned to the Home Office. 

A number of charities have submitted Freedom of Information requests on the issue, and in recent months MPs have put forward 12 written and oral parliamentary questions calling for further transparency. But citing commercial confidentiality, the Home Office has repeatedly refused to confirm whether the profit cap has ever been triggered and if so, how much money has been returned as a result. The contracts are available in the public domain, with the section on the agreed profit cap redacted.

Labour MP for Bury South Christian Wakeford, who has submitted a parliamentary question on the issue, has accused the private asylum seeker accommodation providers of “laughing in the face of the government whilst profiting from human misery”.

“The secrecy from the Home Office citing ‘commercial arrangements privacy’ is nothing more than a smokescreen to cover how badly they are being ripped off with the most recent reports of the government spending £15 million per day on hotels,” he told PoliticsHome

The Home Office’s total asylum seeker hotel budget is around £20 billion. In February the Home Office admitted that it had requested an emergency cash payment of £2.6 billion to cover overspend on asylum seeker hotels.

LLoyd Russell-Moyle, the Labour for Brighton Kemptown has also expressed his frustration at being rebuffed by the Home Office when seeking further information on the issue. 

“Documents show that in the 12 months leading up to February 2022, one booking agency hired by the Home Office tripled its pre-tax profits, going from £2.1 million to £6.3 million. Yet there is a lack of transparency over the profits raised more recently,” he told PoliticsHome

“The government still maintains that contracts are awarded based on what provides the taxpayer with the ‘best value for money’, but all evidence points towards the failure of these companies. This system is not fit for purpose.

Conditions in asylum seeker accommodation have been an ongoing point of concern. Earlier this month the BBC reported that asylum seekers in London were left malnourished or were hospitalised after eating rotten food  provided by the private firms running their accommodation. Last month, the government announced plans to U-turn on controversial proposals to remove HMO licensing regulations for landlords that are housing asylum seekers.

"For months we have been refused information about the profit caps for the controversial asylum accommodation contracts,” Asli Tatliadim, head of campaigns at Refugee Action, said.

“This government’s lack of transparency only proves their disdain for accountability both to the British public and refugees. Private companies should not be making unchecked profit from refugees' misery. Instead, the government must strengthen local authorities to provide lasting solutions to the housing crisis for all, including refugees." 

A Home Office spokesperson said: “Despite the number of people arriving in the UK reaching record levels, we continue to ensure the accommodation provided meets all legal and contractual requirements whilst also providing value for money for the taxpayer.

“We continue to work across government and with local authorities to identify a range of accommodation options to reduce the use of unacceptable hotels which cost £8.2 million a day.”

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