Home Office begs asylum hotels not to evict migrants amid cash-flow crisis

Telegraph

05-04-2025

The Home Office has issued a direct appeal to asylum hotels not to evict migrants amid a cash-flow crisis that arose after it ditched one of its major contractors.
Some companies have already started withdrawing services such as hotel security and housekeeping after the sacked contractor, Stay Belvedere Hotels Ltd (SBHL), failed to make scheduled payments to them.
Industry sources told The Telegraph that other hotel companies were considering similar moves as SBHL sought to renegotiate the way in which it makes its payments to providers of the accommodation for thousands of asylum seekers.
The crisis stems from the Home Office's decision to strip SBHL of its contract to run more than 50 migrant hotels over its alleged behaviour and poor performance.
SBHL is responsible for accommodating as many as 15,000 asylum seekers largely in London and the South East of England. There are currently some 38,000 migrants in hotels at a cost of £5.5 million a day to the Home Office.
Home Office sources said it made its scheduled payment last week to cover the cost of accommodation for March. Under its agreement, SBHL, however, pays the hotels a month in advance. Its failure so far to make these payments for April has precipitated the current crisis, according to senior hotel sources.
SBHL is now understood to be seeking to renegotiate this agreement from April 8 so that it makes its payments weekly in arrears after the hotels have carried the costs for the previous seven days.
'Some have withdrawn services'
Some hotel businesses have, however, warned that they cannot sustain this, raising the risk that they will be forced to withdraw their services and potentially evict asylum seekers.
'Some have withdrawn services. This is the start of many people doing the same. Some will withdraw this or that service,' said a hotel source.
In an emergency alert on Friday, Joanna Rowland, the Home Office's director general for customer services, urged hotels not to pull out of their contracts despite the cash-flow crisis.
'I can confirm that all required payments have now been made by the Home Office and that these will now flow through the supply chain imminently, if not already. In the interim, please be reassured that you will be recompensed for the usual costs incurred with provision of service,' she wrote.
'As ever, the Home Office remains grateful for your support during this transition period. I would reiterate my request that you take no action to cease your services and seek to positively engage with the alternative supplier as we move forwards.'
The Home Office is seeking to transfer the responsibility for running the hotels to its established contractors Serco, Mears and CTM, the latter of which was brought in by the Tories to run the Bibby Stockholm barge for asylum seekers in Portland, Dorset.
SBHL was subcontracted to run the hotels by Clearsprings Ready Homes, one of three overarching providers that have ten-year contracts with the Home Office to provide accommodation for asylum seekers awaiting claims decisions.
Clearsprings has tripled its profits in just two years to £91 million in 2024. The new Labour ministers and officials are understood to be closely scrutinising the agreements with Clearsprings and SBHL amid concerns that they inherited badly drawn contracts that have left the taxpayer exposed.
A Government source said it was up to SBHL and Clearsprings to fulfil their contracts and pay the money owed. 'We are progressing with the transition away from SBHL and Clearsprings. They are co-operating but if they breach their terms at any time and stop co-operating, we will act accordingly,' said the source.