Asylum hotel contract worth £2bn a year to be scrapped

The UK government is set to terminate a £2 billion annual contract with Stay Belvedere Hotels (SBHL), a major provider of asylum accommodation, following concerns raised by a Home Office audit regarding the company's performance.

SBHL currently manages approximately a quarter of the Home Office's asylum accommodation across 51 hotels in England and Wales, including Napier Barracks in Kent, which is scheduled to close in September. The government did not disclose specific details about the issues identified in the review but cited concerns over SBHL’s conduct as a supplier.

In response, SBHL has yet to comment, but its website states that it provides pastoral and welfare services beyond contractual obligations to ensure asylum seekers are treated with dignity.

Border Security and Asylum Minister Angela Eagle emphasized the government's commitment to stricter oversight, stating that SBHL would be removed from the Home Office supply chain. She also warned that further action would be taken if necessary to ensure government contracts meet UK standards.

The earliest the Home Office can end the contract without incurring break costs is September next year, but there is currently no clarity on where the asylum seekers under SBHL’s care will be relocated.

As of December 2024, immigration data showed 38,079 asylum seekers living in hotel accommodations, a decrease from the peak of 56,042 in September 2023. Additionally, Ministry of Justice figures indicate that nearly 42,000 asylum seekers are awaiting appeal hearings after their initial claims were rejected.

The government has reiterated its commitment to ending the use of hotels for asylum housing, though Housing Minister Matthew Pennycook declined to provide a specific timeline when speaking to Times Radio. Meanwhile, officials are exploring potential plans to relocate failed asylum seekers to the Balkans once their appeals have been exhausted.

So far in 2025, over 5,000 migrants have crossed the Channel in small boats, adding to the 36,816 detected making the journey throughout 2024.