Jack Fenwick, a political correspondent, reported that two companies responsible for housing asylum seekers in hotels have pledged to return some profits to the Home Office. Complying with contracts established by the previous Conservative government, Clearsprings, Mears, and Serco are required to reimburse any profits exceeding 5%. An analysis disclosed last week indicated that the three companies had accrued a total of £383m in profits since 2019, as the expenses associated with housing asylum seekers multiplied.
Ministers have been alarmed by the escalating costs of asylum accommodation for several years, a concern that Reform UK highlighted during the recent local elections in England. A spokesperson from the Home Office emphasized that they inherited a dysfunctional asylum system, leading to unnecessary expenses. Efforts have been made to rectify the situation by boosting asylum decision-making and eliminating individuals with no legal right to remain, which has significantly reduced the number of operational asylum hotels.
During a rare appearance at the Home Affairs Select Committee, representatives from Clearsprings, Mears, and Serco discussed plans to return profits. Mears’ director of health and safety compliance, Jason Burt, estimated a reimbursement of £13.8m, pending a Home Office audit. Clearsprings’ managing director, Steve Lakey, stated that the firm had £32m set aside, awaiting approval from the Home Office for transfer. Despite potential reimbursements, overall profits for the three companies are projected to increase due to the expanding use of hotels to accommodate asylum seekers.
The escalating use of hotels to house asylum seekers, a practice that deviates from the initial community-based approach, has been criticized by both Labour and Conservative governments. Decisions made by Boris Johnson’s administration regarding asylum claim processing were cited as a contributing factor to the surge in hotel usage. Clearsprings’ founder, Graham King, who has previously supported the Conservative Party through donations, recently amassed significant wealth from the company’s heightened profits. Amid government scrutiny of contracts and operational practices, the companies defended the services being provided, stressing their compliance with contractual obligations while recognizing the need for improvements in the asylum system
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