Source · Select Committees · Home Affairs Committee
Recommendation 17
17
Deferred
Home Office contract design allows providers to make excessive profits from asylum accommodation.
Conclusion
Despite provider profit margins being at the lower end of the Home Office’s original estimate, the way the profit share clause was designed means that as the value of the contracts has increased, providers have been able to make significantly higher cash profits than was anticipated when the contracts were set up. We are frustrated that the Home Office has left itself without a mechanism to prevent providers making excessive profits as the contract value has increased, largely due to the ongoing use of hotels. (Conclusion, Paragraph 72)
Government response summary AI-generated
The government deflects the conclusion regarding its failure to implement mechanisms preventing excessive provider profits, instead discussing its indexing model for dispersed accommodation, a pilot program for move-on periods, and data sharing guidance.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Deferred
HM Government · verbatim extract
Deferred
The Home Office will seek to introduce a more rigorous profit-share methodology in future asylum contracts to ensure greater transparency and value for money. Work is already underway to incorporate such provisions into future procurements for asylum accommodation contracts. This approach will aim to deliver a more structured and equitable application of profitability, reinforce accountability and drive sustainable commercial outcomes.
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