The companies contracted by the Home Office to provide asylum accommodation are on course for another record-breaking year of profits.
The three major suppliers behind the multi-billion pound asylum accommodation system have already made £383 million in profits through taxpayer-funded contracts.
Nearly half of the profits have been made by Clearsprings Ready Homes, even though it is responsible for about 30,000 asylum seekers — a third of the total in taxpayer-funded accommodation.
It was one of the three contractors awarded Home Office contracts in 2019 to deliver asylum accommodation for ten years.
The expected cost of the ten-year contracts has trebled from an initial £4.5 billion to £15 billion and a projected £7 billion of that is estimated to be paid to Clearsprings.
The company has not reported its accounts since January 2024 when it reported £91 million in profits. This had tripled in just two years.
The first half-year accounts published by the other two companies show they are on course to make record profits.
Serco reported profits of £146 million in total for the first six months of this year, up 2 per cent compared to the same period in 2024. It puts the company on track to beat last year’s record high profits of £274 million.
Mears reported a 5 per cent increase in its half-year results of £32 million, which also puts it on course to beat last year’s record of £64 million.
Both Serco and Mears have said their record profits over recent years were as a result of performance across their company and were not solely the consequence of their Home Office asylum contracts.
Serco states in its half-year accounts that it expects revenue from the asylum contract to fall because of the government’s efforts to reduce the number of migrants in hotels. Mears said it also expected revenue to “normalise” due to the closure of hotels.
Under the terms of their contracts the firms must repay “excess profits” to the Home Office but so far, nothing has been collected by the department.
Clearsprings has made excess profits of £32 million while Mears has made excess profits of £13.8 million. Serco has not made profits above the threshold that requires repayments to the Home Office.
Crowds gather at the Crowne Plaza hotel in London to protest against its use to house migrants
ALAMY
A report by the House of Commons home affairs committee this week found that the Home Office only started to take steps to retrieve the money last year but is still auditing the accounts so it has yet to retrieve a penny of the £46 million it is owed.
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Until March, Clearsprings subcontracted a significant amount of its asylum accommodation to a company called Stay Belvedere Hotels (SBHL), which accommodated thousands of migrants in the south of England, mainly London. Its latest published accounts show it made a record profit of more than £50 million.
However, in March the Home Office intervened and stripped SBHL of all of its contracts to house asylum seekers after the department found concerns over its performance. It has not given any further details regarding the concerns.
Sir Keir Starmer has privately told ministers that he wants to end the practice of housing asylum seekers in hotels altogether within a year amid widespread criticism over their use given the high costs and cause of community tensions.
He had previously pledged to end their use by 2029 but last month said he wanted to “bring that forward”, although he did not give a date.
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The hotels have been at the centre of anti-immigration protests across the country over the last year that have at times spilled over into violence.
Clearsprings has been the big winner in the asylum hotel boom that has resulted from the surge in refugees coming to Britain in recent years.
The company, run by Essex businessman Graham King, who has garnered the nickname “the asylum king”, has recorded almost £187 million in profits since winning the government contract.
The success of this company, headquartered at a discreet blue building on an industrial park in Rayleigh, Essex, has seen King, 58, become a billionaire.
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Little is known about the low-profile businessman and the inner workings of his company.
After moving the family to Canvey Island from Romford, King’s father Jack bought a caravan park from the council that became a mobile home business.
Graham and his brother Jeff worked for the firm, which was eventually sold for £32 million in 2007, by which point he had already struck out on his own by founding Clearsprings in 1999.
HIs association with asylum accommodation started shortly after when he signed a five-year contract under New Labour in 2000 to do so. The firm was described as “profiteering” in the House of Lords at the time.
King, a keen amateur racing driver and small aircraft pilot, is the outright owner of Clearsprings. His golden deal with the Home Office has not been without problems.
Residents at some of the properties managed by his firm have described dismal conditions. Inspectors described two sites run by Clearsprings, Napier Barracks in Kent and Penally Camp in Pembrokeshire as decrepit in 2021.
Serco, which provides asylum accommodation in the northwest, east and the Midlands, to be paid a total of £5.5 billion under the contracts.
The FTSE 250 outsourcing giant, which runs prisons and military bases, is valued at £2.58 billion and had revenues of £4.8 billion in 2024.
Since March, the company has been led by Anthony Kirby, who earns a base salary of £845,000. He could receive a total pay packet in excess of £4 million when a bonus and long-term incentive plan payment is factored in.
Mears is projected to be paid £2.5 billion for providing accommodation for asylum seekers until 2029.
The social housing company, listed on the London Stock Exchange and valued at £300 million, provides accommodation in the northeast, Yorkshire and the Humber, Scotland and Northern Ireland.
Its pre-tax profits rose by 37 per cent to £64.1 million in 2024, from £46.9 million the previous year. Chief executive Lucas Critchley has a salary of £372,000, which can be tripled through bonuses and incentives.