As the Home Office in the UK announces plans to reduce the use of hotels for asylum seeker accommodations, two private companies have come under scrutiny for their record profits.
Clearsprings Ready Homes, one of three private firms with Home Office contracts for asylum accommodation, and Stay Belvedere Hotels Ltd (SBHL), a sub-contractor, have combined to a total profit of £113m, according to their most recently published accounts.
Clearsprings’ Soaring Profits
Clearsprings, whose sole business revolves around providing asylum accommodation, declared a profit of £62.5m after tax for the year ending January 2023. This figure is more than double its previous year’s earnings of £28m.
The company, which boasts a 10-year contract with the Home Office ending in 2029, seems optimistic about its future involvement. Their annual report suggests a keen interest in expanding into larger non-hotel sites, hinting at possible ventures such as ex-army camps. It confidently notes, “Due to the long-term nature of the contract and pre-agreed rates the price risk is considered minimal.”
Mears, Serco, and SBHL’s Earnings
While companies like Mears and Serco provide similar asylum accommodations across the UK, their diverse portfolios make it challenging to extract exact figures solely from asylum housing. Still, it’s evident that these contracts form a significant portion of their business.
SBHL, meanwhile, reports a staggering net profit of over £51m for its annual accounts from October 2021 to September 2022. Interestingly, the company has engaged Crispin Blunt MP for a £15,000 yearly fee, who has identified the company as “a provider of accommodation services to meet [the government’s] requirements”.
Situated in the upscale neighbourhood of Mayfair, London, SBHL expresses a desire to pivot towards longer-term accommodations. Proudly identifying as “a leading provider of the UK government’s temporary provision of temporary accommodation for those seeking asylum in the UK”, the company remains tight-lipped beyond its public accounts, stating, “due to contractual and legal obligations we are unable to comment further.”
Nearly 300 migrants arrived in Dover on Bank Holiday Monday
Charities Call Out Excessive Profits
The government’s claims that asylum seekers cost them over £8m daily in hotel expenses has been overshadowed by the public outcry over the massive profits raked in by these private entities.
Rachel Goodall, leading asylum services at the charity Refugee Action, voiced her concerns, stating, “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.”
Similarly, Graham O’Neill of the Scottish Refugee Council argued against the commercialization of such services. He 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.”
Government and Company Responses
The Home Office, while acknowledging the surge in people arriving in the UK, defended its stance by emphasizing adherence to all legal and contractual requirements. Their spokesperson mentioned, “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 yet to issue a public statement.
