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Government recovers £74m from Asylum Hotel Firms

Government recovers £74m from Asylum Hotel Firms
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The government has recovered £74m from excess profits made by companies running asylum accommodation, the BBC can reveal.

The Home Office said it was recovering the money after a review of contracts after the job came into force last year.

Ministers have faced criticism from MPs for neglecting the day-to-day management of contracts.

But the amount recovered remains a small percentage of the total cost of asylum accommodation.

Home office figures show the total spend was £2.1bn in 24/25 – an average of £5.777M per day.

That makes the amount much less than the cost for the government of the accommodation every week.

Accommodation providers have previously told Parliament they will return some revenue to the government, under the terms of their contracts.

The cost to the taxpayer of the contracts has increased in importance because they were signed.

Dame Karen Bradley, the Conservative chair of the home affairs select committee, said the recovery was “welcome” but a “first step”.

He added: “This is only a small part of the many billions with contracts and costs.

“The government must now set out its long-term plan for how it will deliver a stable and cost-effective asylum accommodation system.”

Ministers have promised to end the use of asylum hotels before the next general election – and the Prime Minister says he wants to push the deadline.

But the Home Office also intends to bear the immediate costs of hotels and other types of accommodation, such as private flats.

The costs for 2024/25 are a reduction from last year – when the accommodation cost £3bn – or £8.3m per day.

Much of that in reducing the average nightly cost per person, as a result of Room sharing and cheaper accommodation used.

Ministers also plan to use alternative accommodation – such as military sites – for asylum seekers.

Home Secretary Shabana Mahhood said: “This government inherited asylum hotel contracts that did not provide good value for taxpayers’ money.

“We’ve already saved £700m in hotel costs. Now we’re turning back millions more in excess revenue. And by the end of this parliament, we’ve closed every asylum hotel.”

Last month, the home office was strongly criticized by the Home Affairs Committee for its handling of asylum accommodation.

MPs on the Committee said the government had “scandalized” billions of pounds of taxpayers’ money.

They also accused the Office of Under-Utilizing Mechanismism of going to excessive profits made by accommodation providers.

There are break clauses in some contracts that will allow ministers to end the use of some accommodation in 2026.

The Home Secretary told the BBC last week that all options were on the table – and that he would study the legal arrangements “carefully”.

Conservative shadow Home Secretary Chris Philp said: “The only way to end this crisis is to end the use of hotels.

“The Home Office spends £5.77m every day on asylum hotels, which means this saving will be lost in 12 days.

“The truth is that when the government comes to the government more illegal immigrants in hotels than in the election, and the first nine months of this year for illegal immigrants crossing the channel.

“The Conservative Party has a serious, tough plan to control our borders.”

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