Asylum hotel provider makes £180m profit despite claims of inedible food and rationed loo paper
When Clearsprings’ managing director, Steve Lakey, told the committee in May his firm had £32m “ready to go” to go back to the government, he said the company was “waiting for the Home Office” before transferring the money.
The Home Office would not tell us the agreed thresholds at which providers should pay back excess profits, but Mr Lakey told MPs that Clearsprings made an average of 6.9% on its contracts and would have to repay anything “just over 5%”.
The company’s contracts with the government run until 2029 but there is a break clause next year, which Kohler said the government should consider using as it is “not getting value for money”.
The select committee also pressed Clearsprings on why £17m had been paid to an offshore company, Bespoke Strategy Solutions Ltd (BSS) – based in the United Arab Emirates since 2019.
Mr Lakey, from Clearsprings, told MPs that BSS is owned by Mr King and it invoices Clearsprings Management, the parent company and not the asylum arm, for what he called “strategic solutions services”.
The BBC identified one company called Bespoke Strategy Solutions based in Dubai but the founder of this company told us she had nothing to do with Mr King and had no links to the UK. She is not aware of any companies with a similar name, she told us.
Clearsprings would not comment about BSS when asked by the BBC.
Mike Lewis, of investigative think tank TaxWatch, says the arrangement of paying a chief executive through a service company in Dubai is “highly unusual”.
Since taking office, the government has reduced the asylum backlog by 24%, returned 35,000 people with no right to be in the UK and cut asylum hotel spending by more than half a billion pounds, a Home Office spokesperson said.
“We commissioned an audit to review the performance of our suppliers, to get the best possible value for taxpayers’ money. Five contracts exceeded their agreed profit-sharing thresholds, and their excess profits are being returned to the Home Office,” they added.
The BBC understands the government has been in discussions about alternative options to private providers using hotels, such as local councils being responsible for housing asylum seekers is looking at expanding the use of military sites.
