Two private companies supplying accommodation for asylum seekers to the Home Office have made a record combined profit of more than £113m, according to their most recently published accounts.
The disclosures have emerged as the Home Office is expected to announce a reduction in the number of hotels being used to accommodate asylum seekers.
Clearsprings Ready Homes is one of three private companies that has contracts with the Home Office to provide asylum accommodation. It is the company’s sole business.
It made £62.5m in profits after tax for the year ending January 2023, more than double its profits of £28m the previous year.
Mears and Serco provide asylum accommodation in other parts of the UK but also do other work and do not disaggregate the profits from the various different areas of their work in their annual accounts, although for both companies their asylum accommodation contracts are a significant part of their business.
Stay Belvedere Hotels Ltd (SBHL) is a sub-contractor providing “contingency bed spaces” across the UK. Its net profit for its most recent annual accounts, from October 2021 to September 2022, is more than £51m. SBHL has employed the services of Crispin Blunt MP for £15,000 a year. He describes the company as “a provider of accommodation services to meet [the government’s] requirements”.
Clearsprings has a 10-year contract with the Home Office, due to end in 2029. Its annual accounts state that it is well-placed to bid for further contracts under the Home Office’s New Plan for Immigration. It adds that it is looking to expand its involvement into larger, non-hotel accommodation sites such as ex-army camps.
“Due to the long-term nature of the contract and pre-agreed rates the price risk is considered minimal,” the annual accounts add.
SBHL has its registered office in Mayfair, London. It says its business has grown significantly and that it wants to prioritise longer-term accommodation going forward. It describes itself as “a leading provider of the UK government’s temporary provision of temporary accommodation for those seeking asylum in the UK”.
While the government has blamed asylum seekers for costing them more than £8m a day in hotel costs, refugee charities have condemned the large profits being made by private companies from these contracts.
Rachel Goodall, head of asylum services at the charity Refugee Action, said: “Private companies are pocketing outrageously large taxpayer-funded profits … This gravy train must stop. It’s time the government funded local authorities to run the system on a not-for-profit basis and spent every penny of this public money to protect refugees and strengthen services for all of us.”
Graham O’Neill, policy manager at the Scottish Refugee Council, said: “The public service of asylum accommodation should never have been under a commercial contract as it has been since 2012. Profits and dividends are inappropriate in housing for vulnerable people including those fleeing war, human rights abuse and violence. We urge the next UK government to trigger this clause for radical renegotiation of the contract in the public interest or to end these as commercial contracts altogether.”
A spokesperson for SBHL said: “In accordance with UK corporate law SBHL has published accounts, due to contractual and legal obligations we are unable to comment further.”
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 remain committed to ending the use of expensive hotels for asylum seekers. That is why we are moving asylum seekers into alternative, cheaper accommodation and clearing the legacy backlog.”
Clearsprings has been approached for comment.
