Government recovers 74m from asylum hotel firms

"The government has recovered 74m from excessive profits made by companies running asylum accommodation, the BBC can reveal. The Home Office said it had recouped the money following a review of contracts after Labour came to power last year. Ministers had faced criticism from MPs for neglecting day-to-day management of the contracts. But the amount recouped remains a small percentage of the overall cost of asylum accommodation."

"Home Office figures show the overall cost was 2.1bn in 24/25 - an average of about 5.77m per day. That makes the sum recovered less than the cost for the government of accommodation every fortnight. Accommodation providers had previously told parliament they would be returning some profits to the government, under the terms of their contracts. The cost to the taxpayer of the contracts has increased significant since they were signed."

"Dame Karen Bradley, the Conservative chair of the home affairs select committee, said the recovery was "welcome" but only a "first step". She added: "This is only a small part of the many billions that the contracts have and will cost. "The government must now set out its long term plan for how it will deliver a resilient and cost effective asylum accommodation system.""

The government recovered 74m from excessive profits made by companies running asylum accommodation. The Home Office recouped the money following a review of contracts after Labour took power. The recovered sum is a small percentage of total asylum accommodation costs, which amounted to 2.1bn in 2024/25, averaging about 5.77m per day. Accommodation providers had previously indicated they would return some profits under contract terms. Costs rose significantly since the contracts were signed. Ministers have sought to reduce immediate costs through room sharing, cheaper accommodation and alternative sites, and pledged to end use of asylum hotels before the next general election.

Read at www.bbc.com