Government recoups 74m from asylum accommodation firms amid criticism over 'chaotic' hotel contracts

"The government has clawed back £74 million from private firms accused of making "excessive profits" under multi-billion-pound asylum accommodation contracts - a figure that amounts to a tiny fraction of the £2.1 billion annual cost to taxpayers. The Home Office confirmed it had recovered the funds following a review into contracts covering more than 200 hotels housing around 32,000 asylum seekers across the UK. The investigation found several suppliers had breached profit thresholds agreed under their long-term deals to provide accommodation for migrants."

"However, the sum recovered is just 3.5% of the department's total asylum accommodation spend for 2024/25, which averages £5.77 million per day, fuelling renewed criticism from MPs who accuse ministers of losing control of costs and contracts. In a damning assessment, the Commons Home Affairs Select Committee said the Home Office had "squandered billions" on migrant hotels and presided over a "failed, chaotic and expensive" system."

"The committee's Conservative chair, Dame Karen Bradley, welcomed the recovery of £74 million but described it as "only a first step". "This is only a small part of the many billions that the contracts have and will cost," she said. "The government must now set out its long-term plan for delivering a resilient and cost-effective asylum accommodation system." MPs also criticised the Home Office for failing to require providers to assess the impact on local communities before opening hotels,"

The Home Office recovered £74 million after reviewing multi-billion-pound asylum accommodation contracts with private suppliers. The review covered over 200 hotels housing about 32,000 asylum seekers and found several suppliers breached agreed profit thresholds in long-term deals. The recovered sum equals 3.5% of the department's asylum accommodation spend for 2024/25, which averages £5.77 million per day. The Commons Home Affairs Select Committee judged the system "failed, chaotic and expensive," saying the Home Office had allowed excessive profits and mismanaged contracts. MPs criticised the failure to assess community impact when opening hotels. The Home Office currently supports 103,000 migrants.

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