Source · Select Committees · Home Affairs Committee
4th Report – The Home Office's management of asylum accommodation
Home Affairs Committee
HC 580
Published 27 October 2025
Recommendations
2
Deferred
Set out plans for a flexible, cost-minimising asylum accommodation system, incentivising hotel exits.
Recommendation
We recommend that the Home Office sets out plans for an asylum accommodation system that can flexibly respond to changing demand, whilst minimising potential costs to the taxpayer. In the short term, the Home Office should identify and implement any …
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Government Response Summary
The government's response focuses on strengthening its internal contract management capabilities, including investing in capacity, training, and accountability frameworks, and commissioning an independent review of these arrangements, rather than setting out plans for a flexible asylum accommodation system, specific incentives for exiting hotels, or the implications of contractual break clauses.
Home Office
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5
Deferred
Institute systematic approach to enhancing Home Office commercial and contract management capability and accountability.
Recommendation
The Home Office should set out plans for enhancing and maintaining its commercial and contract management capability, to ensure that it has the skills and resources necessary to effectively manage the delivery of the contracts and control the costs of …
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Government Response Summary
The government committed to finalising robust amendments to Key Performance Indicators (KPIs) for service providers by February 2026, and to incorporating enhanced KPI frameworks into future asylum accommodation contracts. However, this response did not detail plans for enhancing the Home Office's own commercial and contract management capability.
Home Office
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14
Deferred
Implement clear process for regularly reviewing asylum accommodation subcontractors and increase transparency.
Recommendation
We recommend that the Home Office reports back to us in its response to this report on the outcome of its audit of asylum accommodation subcontractors and implements a clear process for how it will regularly review significant subcontractors. It …
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Government Response Summary
The government's response deflects the recommendation by focusing entirely on policies for Unaccompanied Asylum Seeking Children (UASC) and age assessment processes, rather than addressing subcontractor audits, transparency, or the termination of Stay Belvedere Hotels Ltd.
Home Office
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Conclusions (10)
4
Conclusion
Deferred
The Home Office was warned repeatedly that it needed to ensure it had adequate commercial and contract management capacity, but did not learn this lesson. Failure to do so left it unprepared to respond to the surge in demand for asylum accommodation. The department’s failure to recognise early on that …
Government Response Summary
The government responded by addressing the Independent Chief Inspector of Borders and Immigration's access to contract information, stating current access is supervised and protocols are being updated, rather than detailing plans for enhancing its own commercial and contract management capability. It will consider formalising these arrangements in legislation when parliamentary time allows.
9
Conclusion
Deferred
The work of the Independent Chief Inspector of Borders and Immigration (ICIBI) provides essential scrutiny of the delivery of asylum accommodation. The work of the ICIBI does not reduce the need for systematic assurance, but in the absence of adequate oversight by the Home Office, the role of the ICIBI …
Government Response Summary
The government responded by detailing its plan to close asylum hotels by the end of the Parliament, stating it has already reduced hotel use and is exploring large sites, rather than addressing the Independent Chief Inspector of Borders and Immigration's access to commercial contracts.
10
Conclusion
Deferred
The Independent Chief Inspector of Borders and Immigration should be given access to commercial contracts so they can be properly scrutinised. The legislation underpinning the Inspector’s role should be amended if necessary to achieve this. (Recommendation, Paragraph 56) 97
Government Response Summary
The government responded by outlining contractual obligations for providers to notify asylum seekers of accommodation moves with at least five days' notice, and the provision of induction booklets and Migrant Help access, rather than addressing the Independent Chief Inspector of Borders and Immigration's access to commercial contracts.
15
Conclusion
Deferred
It is extremely disappointing that the Home Office only appears to have started the process for recouping excess profits from accommodation providers in 2024. Accommodation providers told us they had tens of millions waiting to be returned to the Home Office. This money should be supporting the delivery of public …
Government Response Summary
The government deflects the conclusion about its failure to recoup excess profits from accommodation providers by discussing its strategy for dispersal accommodation, national allocation plans, and exiting hotels.
16
Conclusion
Deferred
The Home Office should conclude the process of recouping excess profits for past years as quickly as possible and set out the amounts that have been returned to the department by contract providers. The Home Office should put in place an annual process for auditing profit share data submitted by …
Government Response Summary
The government's response deflects the recommendation to recoup excess profits and implement an annual audit process for profit share, instead focusing on its current and future procurement strategies for dispersed asylum accommodation and engagement with local authorities.
17
Conclusion
Deferred
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 …
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.
18
Conclusion
Deferred
The Home Office should ensure that profit share clauses in future contracts take account of not just profit margins but also the cash value of profits, so that contract providers cannot benefit so substantially from increased demand for and changes to the type and/or base costs of asylum accommodation. (Recommendation, …
Government Response Summary
The government deflects the recommendation to ensure future contracts include profit share clauses that account for the cash value of profits, by discussing its engagement with local authorities and communities regarding asylum accommodation and efforts to combat misinformation.
19
Conclusion
Deferred
The quality of accommodation is highly variable across the country. While there is clearly accommodation of an acceptable standard, too many asylum seekers continue to be placed in accommodation that is inadequate or deeply unsuitable. The accommodation asylum seekers are housed in should be adequate, and it is unacceptable that …
Government Response Summary
The government deflects the recommendation to improve variable accommodation quality and strengthen performance management of providers, by focusing on its strategy to exit all asylum hotels and deliver a range of alternative accommodation sites.
26
Conclusion
Deferred
Migrant Help is not contracted to follow up on or monitor issues and does not have sight of the response from providers and the Home Office. This creates a significant gap in accountability. We recognise the value of enabling asylum seekers to raise concerns separately from accommodation providers and the …
Government Response Summary
The government acknowledges the need to review future delivery options for the AIRE service, stating it is currently reviewing performance frameworks and contract scope, and examining alternative approaches as part of future asylum contract development.
27
Conclusion
Deferred
While we recognise the value of having an independent, national reporting mechanism for issues with asylum accommodation, we are not convinced that all elements of this service should be delivered through a centralised system. It was therefore encouraging to hear that the Home Office is considering more localised models for …
Government Response Summary
The government acknowledges challenges with solely local AIRE service delivery but recognizes the need to review future delivery options, stating it is currently reviewing performance frameworks and contract scope to inform future asylum contract models.