Government seizes £74m from Asylum housing firms amid ‘Chatic’ COULTS CONTCONSTS
The government has already clawed back 74 million from private firms accused of making “excessive profits” under multibillion-dollar residential contracts – a figure that amounts to a tiny fraction of a year’s worth of taxpayers’ money.
The home office has confirmed it received the money following a review of contracts involving more than 200 hotels for asylum seekers in the UK. The investigation found that several suppliers had agreed to breached profit circles in accordance with their long-term contracts to provide accommodation.
However, the amount returned is just 3.5% of the Department’s total residential use for the 2024/25 total budget, measured in millions of
In a damning assessment, the Home Affairs Committee of the Commons Home said that the home office had “invested billions” in displacement hotels and managed a “failed, chaotic” expensive system”. The report said that there was a “visible failure” to manage contracts with private companies, allowing them to make excessive profits from the station crisis.
The chair of the committee, Dame Karen Bradley, welcomed the £74 million recovery but described it as only a “first step”.
“This is only a small fraction of the many billions the contracts have and will cost,” he said. “Now the government must set out its long-term plan to deliver an effective and efficient Asylum residency system.”
MPs also criticized the home office for failing to require suppliers to assess the impact on local communities before opening hotels, saying the decision imposed illegal community pressure.
The home office currently supports 103,000 migrants in tax settlements, including those in settlements, dispersed accommodation and private flats. A standard hotel room costs £144.98 per person per night, compared to just £23.25 for a detached house.
While costs have fallen from £3 billion in 2023/4 to $2.1 billion this year – partly through cheaper accommodation and room sharing – MPS say millions have been lost.
Home Secretary Shabana Mahmood said the Government had inherited “asylum hotel contracts that did not deliver good value for taxpayers’ money” but insisted reforms continued.
“We’ve already saved £700 million in hotel costs. Now we’re getting back millions in excess profits. And at the end of this Parliament,” he said.
The 10-year contracts, signed in 2019 with three private providers, are designed to give the government a longer period of time to manage shelter accommodation across the UK. But after years of demanding hotel spending and emergency spending, ministers are now facing renewed pressure to overturn the scheme – with the MPS warning that, without deep reform, taxpayers will continue to pay “unsustainable” costs.
