Firm paid to house migrants in hotels loses Home Office contract over ‘performance and behaviour'

The Guardian

25-03-2025

Good morning. There are many reasons why people object to tens of thousands of asylum seekers being housed for long periods in hotels and other temporary accommodation, but one is the perception that this is enabling a small number of firms to make huge profits at public expense for providing what is often a miserable service. This morning we learned that the Home Office is doing something about this. It has removed the contract for this work from Stay Belvedere Hotels (SBHL), blaming 'concerns about its performance and behaviour as a government supplier'.
In a news release issued just after midnight, it says:
The Home Office has taken action to remove Stay Belvedere Hotels (SBHL) from government operations.
SBHL, which is responsible for the running of 51 hotels in England and Wales and Napier Barracks housing people waiting for asylum decisions, is being removed following examination of its contract and contractual arrangements with the Home Office, including concerns about its performance and behaviour as a government supplier.
The safety and security of people working and staying in temporary accommodation is a government priority, together with ensuring value for money for the taxpayer. The Home Office has been working carefully over the past weeks to put robust plans in place to ensure asylum services continue operating as normal during this transition with as little disruption to asylum seekers and staff as possible.
And Angela Eagle, the minister for border security and asylum, said:
Since July, we have improved contract management and added more oversight of our suppliers of asylum accommodation.
We have made the decision to remove Stay Belvedere Hotels from the Home Office supply chain and will not hesitate to take further action to ensure Home Office contracts deliver for the UK.
The Home Office confirmed the news after the Times published a report by Matt Dathan about SBHL losing the contract. Dathan says:
Sources said it was one of the worst examples of companies that were exploiting the asylum crisis to make a profit. SBHL's latest published accounts show it made a record profit of more than £50m …
[The move] comes after the Treasury ordered the Home Office to find cheaper providers and to prevent private companies 'profiteering' from the asylum crisis.
In a document published by the Treasury's new Office for Value for Money (OVfM) it says companies that have been contracted to find hotels for migrants have 'made record profits in recent years, leading to accusations of profiteering' …
With more than 38,000 migrants in hotels, it is costing the Home Office £5.5m per day.
Dathan says one of the companies that will take over these hotel contracts is Corporate Travel Management, the firm that ran the Bibby Stockholm barge when it was used to house asylum seekers.
The government is more keen to talk about something else – a Treasury announcement about a £2bn investment in social and affordable housing. As Jessica Elgot and Richard Partington report, the announcement comes a day before the spring statement, at a time when Rachel Reeves, the chancellor, is anxious to persuade MPs that there is more to the government's programme than just spending cuts. They report:
One Whitehall source said the social housing announcement and the £600m in investment on construction skills announced over the weekend were attempts to 'sweeten the pill' ahead of Wednesday by bringing forward plans from the spending review.
The £2bn will effectively bridge the gap between the current affordable homes spending due to expire in 2026 and the next funding settlement which will come in the spending review in June when a successor programme is expected to be announced.
Here is the agenda for the day.
11.30am: Downing Street holds a lobby briefing.
11.30am: Wes Streeting, health secretary, takes questions in the Commons.
After 12.30pm: MPs consider Lords amendments to three bills, including the GB Energy bill.
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