Government ends contract worth billions with one of largest providers of asylum seeker hotels

The government is ending a contract worth billions of pounds a year with one of the largest providers of accommodation for asylum seekers.

Stay Belvedere Hotels (SBHL) houses people waiting for asylum decisions in 51 hotels in England and Wales, as well as the Napier Barracks in Folkestone, Kent, which is due to close and be returned to the Ministry of Defence in September.

The Home Office confirmed the cancellation of the contract, which is worth around £2billion per year, after a review raised concerns about the company’s performance and behaviour.

In a statement issued on Tuesday, it said the contract, which was awarded in 2019, will end at the earliest opportunity in September 2026 after the review of all contracts to provide asylum accommodation.

Minister for border security and asylum Angela Eagle said: “Since July, we have improved contract management and added more oversight of our suppliers of asylum accommodation.

open image in gallery

“We have made the decision to remove Stay Belvedere Hotels from the Home Office supply chain and will not hesitate to take further action to ensure Home Office contracts deliver for the UK.”

However, the housing minister would not be drawn on “the specifics” of the reasons behind the decision.

Asked whether the government would get money back if the company had failed in its duty, Matthew Pennycook also told Times Radio: “The whole purpose of reviewing asylum contracts is to improve the management of them to guarantee value for money for the taxpayer… the operational details are being worked out.

open image in gallery

“I’ll leave it to Home Office ministers to come back with the finer points of detail on the decision they’ve made, but work is underway to ensure the asylum services continue to operate as normal, to deal with the management problems.”

He added: “We did need to review these disastrous contracts on asylum accommodation we inherited. We’re doing so to improve management and guarantee value for money for the taxpayer.”

The Home Office, which is committed to ending the use of asylum hotels, said it was working to “put robust plans in place” to minimise disruption.

open image in gallery

It added that the safety and security of people staying and working in temporary accommodation was a government priority, as well as ensuring value for money.

However, the housing minister refused to give a timeline for when use of hotels for asylum seekers will end.

Asked when the numbers would go down, Mr Pennycook said: “The Tories gave up on processing asylum claims, decision-making in the asylum processing system collapsed by 70 per cent, so we have a huge backlog and if we are going to work through that backlog… then we have got to deal with that problem in the short term. I’m not going to give you a timeline today on when the use of hotels will end.”

A spokesperson for SBHL said: “SBHL has been informed of the decision to end its contract to supply temporary accommodation to asylum seekers in the UK and is in the process of holding discussions with appropriate partners.”