Burnham would end asylum hotel contracts if he was PM, allies say

Andy Burnham would end the multibillion-pound asylum accommodation contracts if he became prime minister, according to allies of the Labour leadership hopeful.

Since March, the Home Office has had the opportunity to trigger a break clause in the ten-year contracts it signed with three private companies which are responsible for sourcing accommodation.

The clause allows the Whitehall department to negotiate or cancel them altogether at any point between now and 2029, when they expire.

According to reports in The Times, allies of Burnham have said he is “very committed” to ending the use of private companies to source asylum accommodation and would activate the break clause if he replaced Starmer and entered No 10.

Burnham would instead devolve the responsibility for sourcing accommodation to local authorities with asylum seekers instead housed in dispersal accommodation.

This includes bedsits and multi-occupancy homes.

But it is unclear if the Makerfield by-election candidate would continue the policy of home secretary Shabana Mahmood, of moving migrants into large sites such as military barracks.

Mahmood is not reportedly considering triggering the break clauses, despite being said to have agreed that they are “terrible”, because of the lack of alternative options and the belief the government can end the use of hotels within the current contracts.

Ending the use of hotels is a Labour manifesto commitment to be met by 2029.

Burnham’s views

A spokesperson for Burnham told The Times that he believed “hugely profitable outsourced contracts” was “not the basis for a fair asylum system”. 

They added that Burnham “stands by his view” and that he has been clear the current situation is “not fair on communities here and need to change”.

Last year, Burnham called out the Home Office’s handling of asylum accommodation, arguing the use of hotels was “not acceptable” and “real change” was necessary.

He also called the manner in which the Home Office dismissed concerns of members of the public living near migrant hotels”scandalous”.

But a source involved in the provision of asylum accommodation questioned whether Burnham’s approach would work.

This is because many councils were struggling with finding temporary accommodation provision for other people in need such as the homeless and newly released prisoners.

The contracts

The contracts with Serco, Mears and Clearsprings Ready Homes were signed in 2019 when almost all asylum seekers were housed in dispersal accommodation. 

But a report by the home affairs committee earlier this year said that the “flawed contract design” allowed contractors to house increasing numbers of asylum seekers in hotels rather than the cheaper dispersal accommodation. 

This meant that the practice of accommodating asylum seekers in hotels became permanent following the Covid pandemic and hit its peak in 2023, with 56,042 being housed in hotel rooms.

The numbers have since more than halved, with the latest figures detailing that 20,885 asylum seekers were living in hotels at the end of March.

The Home Office said it had no plans to trigger the break clauses in the three contracts but was firmly committed to ending the use of hotels before 2029.