A company managing hotel accommodation for thousands of asylum seekers has been axed by the Home Office due to performance concerns and replaced by the firm that ran the Bibby Stockholm barge. As a result the 51 hotels it runs will close.
In a late-night statement the Home Office said it had removed Stay Belvedere Hotels (SBHL), which manages 51 hotels across England and Wales and Napier barracks in Folkestone, Kent, from government asylum operations.
The Home Office confirmed last week that Napier barracks will close in September. It is not known when the 51 hotels will close. Asylum seekers in those hotels will be moved into existing accommodation rather than opening new ones.
Australia-based Corporate Travel Management (CTM), which was criticised for its running of the Bibby Stockholm barge in Portland, Dorset, is coming onboard instead.The barge cost more than housing people in hotels.
This is the first time the Home Office has axed a major provider in its 10 years of outsourcing asylum accommodation contracts worth £2bn a year.
SBHL is a subcontractor of Clearsprings Ready Homes, one of three companies that have contracts with the Home Office to provide accommodation for asylum seekers. Home Office sources confirmed that officials told Clearsprings to terminate the services of SBHL.
In February 2021 a joint investigation by the Observer and ITV revealed there were allegations of sexual harassment and intimidation in accommodation run by SBHL along with claims that staff were paid below the minimum wage. Many of the staff currently working at Napier barracks, which is due to close in September and will be handed back to the Ministry of Defence, are employed by SBHL.
The Home Office said the decision to cancel its contract with SBHL was prompted by concerns about its performance and behaviour as a government supplier but did not provide any more detail about its concerns. There will be a transition period to new arrangements but the timescale for this is not known.
The contract for managing SBHL’s hotels will be transferred to existing providers Mears and Serco along with CTM. Most of the hotels are in London but there are also hotels in Bournemouth, Eastbourne and Folkestone.
Angela Eagle, the minister for border security and asylum, said: “Since July, we have improved contract management and added more oversight of our suppliers of asylum accommodation.
“We have made the decision to remove Stay Belvedere Hotels from the Home Office supply chain and will not hesitate to take further action to ensure Home Office contracts deliver for the UK.”
A spokesperson for SBHL said: “SBHL has been informed of the decision to end its contract to supply temporary accommodation to asylum seekers in the UK and is in the process of holding discussions with appropriate partners.”
A document published by the Treasury’s new Office for Value for Money (OVfM) says companies that have been contracted to find hotels for asylum seekers have “made record profits in recent years, leading to accusations of profiteering”.
There are more than 38,000 asylum seekers in hotels, costing the Home Office £5.5m a day. A total of 5,847 people have arrived so far this year, up 36% on last year.
Sally Hough, the director of Napier Drop-In Centre, which provides support for asylum seekers, said: “When the camp first opened it was clear that the site was in chaos and no one had the experience to run a mass accommodation site for 500 people. They were making it up as they went along. This culminated in the catastrophic mismanagement of Covid safety protocols leading to a mass outbreak of 197 Covid cases.”
Tim Naor Hilton, the chief executive of Refugee Action, said: “Handing over contracts with Stay Belvedere Hotels to the company that managed the Bibby Stockholm barge begs the question whether there will be any positive change.
“Instead of this damaging plaster, the government must work towards ending all privately contracted accommodation.”
It must properly fund and support local authorities to house people in our communities, so every penny of this public money is spent on protecting refugees and strengthening services that all of us rely on.”
Parliament’s cross-party home affairs committee is conducting an inquiry into the provision of asylum accommodation. More than 100 pieces of evidence from NGOs, lawyers and accommodation providers have been published, most of them highly critical of the current state of this accommodation.
