‘Inedible food, dirty toilets’ but ₹2,000 crore in profit: How UK asylum hotel provider made millions

Clearsprings Ready Homes, a company that provides accommodation for asylum seekers, has made nearly £187 million (nearly ₹2,000 crore) in profit since securing government contracts, despite allegations of poor living conditions at the hotels it uses, BBC reported.

Clearsprings is one of three firms awarded 10-year contracts from the Home Office to provide asylum seeker accommodation.

The overall cost of these services has more than tripled since the contracts were signed, rising from £4.5 billion to £15 billion. Clearsprings, which handles accommodation in southern England and Wales, is projected to receive £7 billion under the current terms.

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Asylum seekers in hotels that have been the focus of protests this summer have expressed frustration, suggesting that the real issue lies with companies like Clearsprings, which are profiting from government contracts. The controversial hotel contracts have also come under scrutiny by Members of Parliament.

Toilets, mattresses are dirty

While Clearsprings promotes itself on its website as providing “value for money, quality, and transparency,” critics, including charity representatives, argue otherwise. Asylum seekers have raised concerns about poor living conditions, such as inadequate nutrition, hygiene issues, and the rationing of essential supplies like period products and toilet paper.

One asylum seeker from South America, who has been living in a hotel for two years with her young daughter, described the conditions as "terrible," saying that the facilities were dirty, broken, and unfit for living, BBC reported.

Maia Kirby from Good Jobs First criticised Clearsprings, telling the BBC that the company “pays as little as possible to suppliers and takes as much as they can in profits.”

Also Read: Anti-migrant protests in London, Essex: Demonstrators clash with police over asylum hotels; police make arrests

Clearsprings alone supports around 30,000 asylum seekers across southern England, London, and Wales, with about half of them accommodated in hotels through subcontracting.

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The asylum population in contracted accommodation has more than doubled since December 2019, growing from around 47,000 to an expected 1,10,000 by December 2024.

Clearsprings Ready Homes saw its pre-tax profit surge by 60% to £119 million (~ ₹1,300 crore) in its latest financial year ending January, according to the Financial Times (FT). This increase in profit comes amid ongoing high demand for accommodation services. The rise has raised concerns among ministers, with reports suggesting that the Home Office is “shocked” by the level of profits.

MP calls company's profits ‘obscene’

During a parliamentary hearing, Clearsprings acknowledged that operating hotels can be more profitable than providing long-term housing, admitting that "living in hotels was ‘really bad for people’."

MP Paul Kohler slammed the scale of the company's profits, calling it “obscene,” especially given that the contracts are structured so that providers earn significantly more from hotel accommodations, sometimes up to eight times more than from permanent housing.

Clearsprings told MPs that it would refund any profits exceeding 5% margins. However, the company has reported an average margin of 6.9%, indicating that it is consistently making profits above the stated threshold.

The government had already started considering whether to return the oversight of asylum accommodation to local councils, as opposed to continuing to outsource it.