Select committee: Home Affairs Committee
Conclusion 17
4th Report – The Home Office's management of asylum accommodation
Published 27 Oct 2025
Addressed to Home Office
Home Affairs Committee Asylum accommodation All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
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)
From: Home Affairs Committee, 4th Report – The Home Office's management of asylum accommodation (HC 580), 27 October 2025
Government response
The government responded to the whole report on 22 January 2026 (deadline 27 December 2025).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government sets its response within its 'Restoring Order and Control' programme, committing to exit asylum hotels 'as soon as possible', while setting out some actions already taken and giving reasons where it does not agree with a recommendation.
- On hotels, the government says it will close them "as soon as possible, and by the end of this Parliament", noting use has fallen from over 400 at its peak to 197 as of 5 January 2026. It does not comment on the timing of individual closures.
- On contract management, it says it has strengthened capability and commissioned an independent review led by Mark Beaton, and reports recovering £74 million in profit share and service credits in the current financial year.
- It says the Home Office "will seek to introduce" a more rigorous profit-share methodology in future contracts, and that revised KPI amendments "will be finalised by February 2026".
- It does not agree to account for Contingency Accommodation directly in the National Allocation Plans, saying this would limit its ability to increase Dispersal Accommodation in areas that already host Contingency Accommodation.