The companies profiting from refugees’ misery.
You might have heard the phrase ‘the asylum system is broken’ used when the asylum backlog, the government’s asylum accommodation, the cost of hotels, or the lack of safe routes and Channel crossings are discussed.
But it’s government policy that gives private contractors the opportunity to make millions in taxpayer-subsidised profit from hostile accommodation, surveillance, and even military-style operations in the Channel.
It’s not a ‘broken system’, it’s not a ‘crisis’, it’s not an ‘emergency’. It’s a system that works perfectly well for those in government who use racist hate speech to distract from their failings.
Politicians design it to be cruel and to punish refugees and people seeking asylum and pay private contractors billions to run it. That’s why we call it the asylum-industrial complex.
Watch our campaign video
Who are these companies? What are they doing within the asylum system? And how much are they making off the back of it? Refugee Action’s Head of Campaigns Asli explains it all.
In July 2023 the government stated that the asylum system currently costs the UK some £3 billion a year and rising. In our opinion, that’s a big incentive to keep demonising people.
All while the government engages in acts of performative cruelty rather than processing protection claims quickly and fairly and offering protection to those who desperately need it.
Tens of thousands of people seeking protection are subject to what we consider to be de-facto detention – a form of detention in which people are held indefinitely, and their freedom of movement and basic liberties are restricted.
While private companies win lucrative contracts with the Home Office, there is little transparency or monitoring. Despite numerous complaints, fines, and scandals (for example, in 2020 Serco won a £45 million covid-19 test-and-trace contract despite £1m fine for failures in its asylum accommodation contract in 2019) , the contractors keep being awarded more government money.
Charities and councils have backed the call for asylum accommodation to return to a not-for-profit model, while standards for asylum housing should be brought into line with the rest of the population and adjusted for specific needs.
It doesn’t have to be this way.
The asylum system should be there to make people safe, not to make rich people richer.
We need to see profit taken out of the equation and every penny of public money available to the refugee protection system spent on protecting refugees.
That means building a not-for-profit asylum system that invests in the public services that we all rely on, recognises the rights and dignity of people seeking safety, ends detention and houses people in communities.
Listen to our podcast
The experts by experience podcast gives a voice to people who have sought safety in the UK and witnessed our refugee and asylum systems first hand.
In this episode, released as part of the MOST WANTED campaign, the panel discuss dispersal accommodation, the housing that people are ‘dispersed’ to after claiming asylum, and the impact that the way the system works has on refugees.
Tara Povey, Policy and Research Manager at Refugee Action, hosts this episode and is joined by Dr. Jonathan Darling, Elika Ansari, Raman and Grace. They cover personal experiences of dispersal accommodation, the history of its privatisation and what a better alternative might look like.
That’s right, the same government that uses racist dog-whistle politics to justify its hostile environment against refugees and migrants.
In 2019 the government awarded asylum accommodation contracts worth £4 billion for 10 years to just three companies – Serco, Mears and Clearsprings Ready Homes. It came after a procurement process in which the National Audit Office described the level of competition as “limited”.
The Department awarded three regions to sole bidders, including Serco in the northwest and Clearsprings Ready Homes in the south.
We believe there should be greater transparency about the process to award contracts, and greater scrutiny of the histories of those given the awards. Government should not be awarding contracts to any companies with a history of complaint or failure.
Several of these accommodation providers had been awarded other government contracts – most notably for managing the government’s response to covid and for running other forms of temporary accommodation:
- In 2020 Serco wins £45 million covid-19 test-and-trace contract despite £1m fine for failures in its asylum accommodation contract.
- Corporate Travel Management – the company that was recently awarded a £1.6 billion contract to run among other services the Bibby Stockholm barge, also held a covid-era government contract.
- Mears Group PLC profits from contracts in asylum accommodation and provides ‘temporary housing’ where Shelter has reported that people facing insecure housing and homelessness are also experiencing substandard conditions.
Meanwhile, the conditions for people living in asylum accommodation long term are terrible: crowding, malnutrition and hunger, restricted movement, mould, room inspections, and attacks by racist groups.
These issues were investigated in a report published by Refugee Action in April 2023, which you can read here.
Conditions in dispersal or longer-term accommodation which are run by the same contractors are often just as bad and Refugee Action has seen cases of collapsed ceilings, mould, infestations and sewage leaks.
The Government says the cost of its cruel and unworkable Illegal Migration Act (the one that lets it lock up people seeking safety indefinitely) could hit £6 billion over the next two years. That is another £6 billion added to the taxpayer bill for costly and hostile policies.
Let’s be clear, these policies would never be acceptable even if they were cheaper.
But even the government has admitted that its spending has become “unacceptable” on a system we say is hostile.
That’s why, since June 2023 the government has claimed that it is trying to “save tax-payers money” – but their profit-driven model will be intensified with the introduction of barges (prison ships) and former MOD camps.
Serco and Clearsprings are set to run camps in RAF Wethersfield and Scampton that the government has planned without consulting local people, organisations and businesses, arguing that this is justified under planning law because it would prevent an emergency that “threatens serious damage to human welfare”.
Barges, such as that run by CTM, and camps such as those proposed to be run by Serco and Clearsprings will magnify the issues experienced by people who have been put in former hotels with more restrictions on movement, more crowding, and more segregation.
The use of inappropriate quasi-detention in hotels is also set to continue and intensify, with the government’s “maximisation” policy meaning that 11,500 more “places” are to be found in hotels by forcing people to share rooms.
This is despite the fact that in May 2020 accommodation providers committed before the Home Affairs Select Committee not to move unrelated adults into shared bedrooms. This comes while housing contractor lobbying has led to government pausing HMO licencing for asylum housing for the next two years.
Creating dangerous conditions for those living in the properties but in our view retaining profits for the contractors.
Running a cruel asylum system for profit is not an emergency but a political choice.
Government policy is effectively protecting and potentially increasing the profits of private contractors, while shifting the burden of ‘cost-savings’ onto people with devastating impact on human lives.
The government has other options.
- Charities and local authorities have supported the call to stop running asylum accommodation for profit and for the government to work with Local Authorities and NGOs to house people in appropriate, high-quality accommodation in the community.
- Housing people in the community would mean people are welcomed, safe and can feel a sense of belonging. It would improve access to services for them and for the communities they are a part of and provide opportunities to take part in community life such as volunteering. People would be able to live independently with freedom of movement and access to appropriate resources and would not have to be isolated and segregated in mass holding sites and hotels.
- Standards for asylum seeker housing should be brought into line with those of the rest of the population and adjusted for their specific needs – you can read Refugee Action’s accommodation principles here.
- The profit driven model must end. But while contracted accommodation continues to exist, accountability and reporting mechanisms should be put in place immediately with financial penalties for providers who fail to comply.
- People seeking asylum are a part of the broader UK population who need safe, appropriate, and high-quality housing but are being failed by the policies of the current government. Solutions to a housing crisis which disproportionately affects people subject to the hostile environment must be funded by government who should work with councils to invest in a new generation of decent, affordable social homes.
Clearsprings made £62.5 million in profit during the 12 months to January 2023. In 2022, its three directors shared dividends of almost £28m.
Their strategic report for 2021 lists its principal activities as ten-year contracts held with the Home Office for the provision of asylum accommodation, support and transport services in the south of England and Wales.
Demand for which is “…due to high levels of political and economic turmoil in many countries”.
Clearsprings runs Napier, an ex-military barracks which is being used to house refugees in Kent in conditions described as “squalid” by lawyers of the residents.
In 2016 accounts published by Companies House showed that the Chairman of Clearsprings paid one of its executives £960,000 in the same year that there were 59 complaints about the company, including reports that people seeking asylum were forced to wear red armbands at an accommodation centre in Wales.
It also ran the Penally camp in Wales where asylum seekers accused the Home Office of ignoring repeated complaints over food and conditions, and where there were repeated protests including a hunger strike by residents.
We asked Clearsprings for a response to these points. They declined to comment.
Financial statements list adjusted profits before tax at £35.2 million for year ending December 2022, an increase of 37% over that achieved in 2021.
Its Annual Report for 2022 states: “Both financially and operationally, the most significant contracts for the Group are those under which we provide accommodation and support for asylum seekers in the North-East of England, Scotland, and Northern Ireland.”
In January 2020, Sheffield Council’s Housing Chair demanded that Mears be sacked from its asylum housing contract.
The Councillor said: “the policy of Sheffield City Council is that we want this asylum housing contract to revert to the Council. We will push for the Mears contract to be terminated by the Home Office. I think the job of a local council is to do its best to make sure that all its residents have safe and decent homes to live in.”
The Guardian, the Institute of Race Relations and Corporate Watch reported on the death in May 2020 of Adnan Olbeh, a young Kurdish Syrian man who was found dead in a Glasgow hotel where he had been placed by Mears Group under its management of the UK’s “asylum dispersal” scheme.
He was 30 years old, from Syria. The cause of death is unclear, with postmortem examination delayed by the covid crisis.
We asked Mears for a response to these points. They said: “Mears is an experienced provider of housing across the UK and we have approached the AASC contracts committed to treating all our service users with dignity and respect.”
Along with immigration, one of the areas of Serco’s specialisation is prisons and detention, it operates six adult prisons in the UK.
Its 2023 half year results state that revenue increased by 13%, or £294m, to £2,472m (2022: £2,178m). Underlying operating profit increased by 14%, or £18m, to £148m (2022: £130m).
Financial statements state that the rise in profits were due to “strong demand for immigration services and the ramp up of contracts signed in prior years more than offset a 12% impact from Covid-related work as well as lower volumes in Asia-Pacific.”
Serco has operations in the Middle East, most notably in Saudi Arabia and the UAE which account for 4% of its total revenue, and 4% of underlying operating profit. In the six months to 30 June 2023 it gained £15.6 million in revenue from its Middle East operations in the area of defence.
In 2023 the Home Office confirmed that Serco will run the proposed camp at RAF Scampton in Lincolnshire under the existing AASC contract.
The company also runs Yarl’s Wood detention centre which has been the focus of protests at reportedly poor conditions and whistleblowing revealing sex abuse, lack of engagement with mental health in relation to assessment and safeguards, and an “anti-immigrant culture”.
Serco’s well-documented challenges in 2013 and 2014 were included in the 2017 revelation in The Paradise Papers that it was considered a “high-risk client with history of failures” by an offshore law firm.
Its annual profits surged 21% to £216m on the back of covid contracts despite criticisms of its role in the government’s test and trace scheme.
Edward Argar was appointed as Minister of State at the Ministry of Justice on 27 October 2022, ten years after he worked as a former head of UK and Europe public affairs at Serco.
We asked Serco for a response to these points. They said: “Our teams are committed to supporting the asylum seekers accommodated by Serco with compassion, dignity and respect. The safety and wellbeing of the people in our accommodation is always our top priority”.
Corporate Travel Management (CTM) was contracted to run the barge Bibby Stockholm as part of its award of the Bridging Accommodation & Travel Services contract by the UK Home Office, valued at approximately £1.6bn.
The contract commenced 1 March 2023 for two years with the ability for a one-year extension in line with ongoing demand requirements. Corporate Travel Management shares surged on $3bn contract with UK Home Office.
The Guardian reported that on 7 August 2023, CTM as one of the Bibby Stockholm contractors, were told by Dorset City Council environmental health that the barge had potentially dangerous legionella bacteria. Evacuation of the 39 people on board the barge did not take place until August 11, four days later.
The Guardian also reported that documents released under FoI laws showed officials’ concerns after first asylum seekers boarded. Their fire inspection report, released under FoI, said that lives could be put at risk because there were too few fire escapes, a lack of fire drills, and problems with air vents that would have to be rectified within weeks.
We asked CTM for a response to these points. They said: “Our services, which we seek to provide to the very best of our ability, have been used by a number of successive governments for a multitude of travel-related needs.”
- ‘Charities Protest Capita AGM over Controversial Government GPS Tracking Contract – Privacy International, May 2023.
- ‘Home Office Set to Advertise 385-million Private Border Security Contracts’- Corporate Watch, November 2021
- ‘UK Home Office Tekever Maritime Surveillance – International Security Journal, March 2023.
- Illegal Migration Bill Overarching Factsheet – Home Office, July 2023
- ‘Serco Wins Covid-19 Test-and-Trace Contract Despite £1m fine – The Guardian, June 2020.
- New Asylum Accommodation Contracts Awarded – GOV.UK.
- Asylum Accommodation and Support – National Audit Office (NAO) Report, July 2020.
- ‘Serco Wins Covid-19 Test-and-Trace Contract – The Guardian.
- ‘Minister Defends ex-Serco Lobbyist’s Justice Brief – The Guardian, June 2018.
- ‘How a UK Contract Cushions the Virus Hit for Corporate Travel’ – Australian Financial Review, December 2021.
- ‘Mears Group: Scandal-hit Council Housing Profiteer Turns Asylum Landlord – Corporate Watch, February 2019.
- ‘Cashing In – How a Shortage of Social Housing is Fuelling a Multi-million Pound Temporary Accommodation Sector – Shelter, February 2020.
- Hotel Tycoon Rakes in Nearly £100,000 a Day After Scoring Contracts to House Migrants – Daily Mail Online, June 2023.
- ‘Private Firms Profiting from UK Asylum Hotels – BBC News, March 2023.
- ‘Workers in Asylum Seeker Hotels ‘Exploited’ and Paid Below Minimum Wage – ITV News, February 2021.
- ‘Illegal Migrants Plan Could Cost £6bn Over Two Years, Say Government Projections’ – BBC News, June 2023.
- Rishi Sunak: £4bn cost of UK asylum system ‘unacceptable’ – The Telegraph, August 2023.
- ‘‘Council Loses Court Bid to Block Asylum Seekers Plan for Essex Base – BBC News, April 2023.
- Home Affairs Committee, May 2020.
- The Houses in Multiple Occupation (Asylum-Seeker Accommodation) (England) Regulations 2023.
- Housing Association Standards – GOV.UK.
- ‘Firm Managing Hotels for UK Asylum Seekers Posts Bumper Profits’ – The Guardian, October 2022.
- Clearsprings Ready Homes Ltd. Strategic Report for the Year Ended January 2022.
- ‘Asylum Seekers in PM’s Constituency Claim Accommodation ‘Not Fit to Live In’ – The Guardian, December 2021.
- ‘Home Office Housing Provider to Make Urgent Repairs to Asylum Seeker Flats – The Guardian, January 2022.
- ‘Asylum Seekers in PM’s Constituency Claim Accommodation ‘Not Fit to Live In’ – The Guardian.
- ‘Refugees are Being Housed in Infested Hotels by the Home Office’s Slum Landlords – Corporate Watch, January 2022.
- Home Office Factsheet: MoD Wethersfield Asylum Accommodation, August 2023.
- ‘The chairman of the company which runs a controversial asylum centre was paid £960,000 last year’ – Wales Online, February 2016.
- ‘Asylum Seekers at Penally Camp Accuse Home Office of Ignoring Repeated Complaints Over Food and Conditions – The Independent, January 2021.
- ‘Mears Must be Sacked From Asylum Housing Contract’ Demands Sheffield’s Housing Chair – Institute of Race Relations, January 2020.
- Mears Group 2020 Update: Scandal-Ridden Landlord Under Fire From Glasgow to Gloucester – Corporate Watch, June 2020;Adnan Olbeh: Killed by the State – Institute of Race Relations, May 2020.; From Sudan to the Park Inn: The Tragic Story of a Migrant’s Killing – The Guardian, October 2020.
- Serco’s annual profits surge 21% to £216m on back on Covid contracts | Serco | The Guardian
- Home Office Factsheet: Scampton Asylum Accommodation, August 2023.
- ‘Whistleblower Reveals Sex Abuse and Anti-Immigrant Culture at UK Detention Centre’ – International Business Times, May 2014.
- ‘Serco a High-Risk Client with History of Failures, Offshore Law Firm Found – The Guardian, November 2017.
- ‘Serco and G4S Order NHS Test-and-Trace Suppliers to Clean Up Act on Tax -The Guardian, June 2021.
- Biography, The Rt Hon Edward Argar MP – GOV.UK.
- Corporate Travel Management Shares Surge on $3b Contract with UK Home Office’ – Business News Australia, April 2023.
- Contractors Told About Legionella on Day Asylum Seekers Boarded Barge – The Guardian, August 2023.
- ‘Fire Safety Report Demanded Five Changes on Bibby Stockholm’ – The Guardian, August 2023.