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
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.
Government Response
Deferred
HM Government
Deferred
The impact of asylum accommodation on local authority areas is actively considered, particularly for dispersed accommodation, using an indexing model. This model determines the required level of dispersed accommodation in each local authority area, considering factors such as market availability, population size, and local pressures – for example, GP capacity Recognising the importance of evidence-based policy, the Home Office launched a pilot programme in December 2024 to temporarily extend the move-on period for individuals granted leave from asylum accommodation to 56 days. In September 2025, the pilot was amended to revert to a 28-day period for single adults (with some exceptions) and has since been extended in its current form until 31 January 2026. The Home Office is reviewing the findings from an independent evaluation that took place regarding the impact of this pilot. The evaluation has gathered insights from local authorities, devolved governments, service providers, and voluntary sector partners. The findings from the evaluation, alongside other information such as operational data and the impact of the pause to the pilot in the Summer, are being reviewed to help inform the longer-term approach which will be decided by Ministers. This measured approach will ensure that our future arrangements are sustainable and continue to meet our statutory duties while supporting those granted asylum effectively. The Home Office remains committed to ensuring that local authorities receive timely information about newly recognised refugees at risk of homelessness, enabling prompt homelessness assessments within statutory timeframes. In partnership with local authorities, health and education providers, and the police, the Home Office and its accommodation providers are dedicated to improving services for supported asylum seekers. Recognising the crucial role of data, all accommodation providers have been issued with guidance on appropriate data sharing – distinguishing between when personal data can be shared with third parties and when aggregated, non-personal information is more suitable for local partners. Our aim is to maintain a consistent approach across the UK, working collaboratively and pragmatically with local partners to facilitate access to essential services for supported asylum seekers. The Home Office continues to analyse the results of any pilot introduced, and it is important that the necessary time is taken to review evidence before making any longer-term policy decisions. Community cohesion