Asylum housing contractors will return millions of pounds in profits after growing public pressure and rising hotel costs. Two companies, Clearsprings and Mears, have confirmed they plan to repay earnings that exceed a five percent cap. A third company, Serco, reported profits below the repayment threshold.
These repayments come under contracts signed in 2019 with the UK government. The agreements require asylum housing contractors to return any profits above five percent. A recent report revealed that these companies made a combined £383 million in profits since 2019.
Jason Burt of Mears told MPs that his company expects to repay £13.8 million. Steve Lakey of Clearsprings added that £32 million is set aside and ready to transfer. However, both repayments are pending final approval from the Home Office. Officials have yet to complete audits that confirm final amounts.
Serco explained that it would not repay funds, citing lower earnings under the same contract terms. Despite this, all three firms said they support moving away from hotel use.
Asylum housing contractors have seen earnings rise as hotel use increased. When contracts began in 2019, most asylum seekers stayed in community housing. Now, around one-third live in hotels, which cost significantly more.
According to the National Audit Office, hotels now absorb three-quarters of all asylum accommodation spending. This change has caused concern among government officials and taxpayers alike.
A government spokesperson blamed past failures for the current crisis. They highlighted a backlog in asylum claims and wasted public funds. Officials also claimed that recent reforms have accelerated decision-making by over 50 percent.
Ministers expect to close more hotels as new systems improve processing. They estimate these actions could save £4 billion by 2026. As part of these efforts, the government has removed 24,000 individuals who lacked legal status.
Meanwhile, pressure continues to mount on contractors and policymakers. Both Labour and Conservative parties have pledged to end the use of hotels for asylum seekers.
Asylum housing contractors say they want long-term solutions that lower costs and serve vulnerable people more effectively.
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