This marks the first time in a decade that the Home Office has removed a major provider from its asylum accommodation contracts.

The Home Office has decided to terminate its contract with Stay Belvedere Hotels (SBHL), which manages 51 asylum hotels, due to performance concerns.

SBHL has operated these hotels since being awarded the contract in 2019, providing accommodation for asylum seekers awaiting decisions.

This contract, valued at approximately £2 billion annually, will end at the earliest opportunity following a review of asylum accommodation contracts.

The decision to remove SBHL marks a significant shift in the government's approach to managing asylum accommodation services.

Housing Minister Matthew Pennycook emphasized the need for improved management of asylum contracts to ensure taxpayer value amidst a significant backlog in asylum claims.

The Home Office is committed to phasing out the use of hotels for asylum seekers, although they are expected to remain in use for at least four more years.

The transition to new management will involve existing providers Mears and Serco, along with Corporate Travel Management (CTM), although a specific timeline for this transition is not yet known.

Critics, including refugee advocates, are skeptical that transferring contracts to CTM will lead to significant improvements and are calling for an end to private accommodation contracts.

Concerns about SBHL's management practices have been raised, including allegations of profiteering and poor treatment of staff.

This contract termination comes ahead of a £2 billion investment announcement in social and affordable housing by the government, aimed at addressing housing needs in the UK.

Currently, over 38,000 migrants are housed in taxpayer-funded hotels, costing the government approximately £5.5 million daily.