The flat is the same. The tenant is not. Southwark Council pays £1,790 a month to a landlord for a three-bedroom property used to house a family on its social housing list. Clearsprings Ready Homes, a Home Office contractor, reportedly offered £4,500 a month for the same flat, with bills, council tax and maintenance covered and a three-year contract attached, to house asylum seekers instead.
The landlord refused. He told The Sun that accepting would have meant ending his agreement with the council and putting families at "serious risk of homelessness". He said he was not prepared to do it, and that many landlords simply see the offer as a chance to earn more.
The distinction between the figures matters, and it has been blurred in much of the reaction this week. The £1,790 is a rent the council currently pays. The £4,500 is a proposed rent that the landlord says he was offered and did not accept. The Home Office does not pay that sum directly for that property: it pays Clearsprings a capped, contractually agreed rate under a ten-year contract, and the company negotiates rents with landlords inside that arrangement. What the public is entitled to see is how those two numbers relate, and neither the rate the department pays nor the profit threshold it enforces has been published.
Great British PAC's position
Great British PAC believes British taxpayers deserve to know why one publicly funded housing arrangement can offer substantially more for a family property than another public authority responsible for housing homeless families. The organisation argues that the Home Office must demonstrate that asylum accommodation procurement is not unnecessarily driving up costs or undermining councils' ability to fulfil their statutory housing duties. Public money should not be used in ways that leave vulnerable families competing against government-funded contractors for the same limited supply of homes.
That position rests on a documented collision of duties rather than on the single Southwark case. Councils have a statutory duty to accommodate homeless households. The Home Office has a statutory duty to accommodate people seeking asylum while their claims are decided. In London both duties are discharged in the same private rented market, from the same shrinking pool of three-bedroom flats, and both are funded by the taxpayer.
The consequences are in the government's own statistics. On 31 March 2026 there were 135,580 households in temporary accommodation in England, a record, including 86,460 households with children and 177,530 children. London carries the heaviest load at 21.1 households per thousand, against 5.5 across England.
Claire Bullivant, Chief Executive Officer of Great British PAC, said:
"[APPROVED QUOTE FROM CLAIRE BULLIVANT TO BE INSERTED HERE]"
A bidding war funded by the same taxpayer
Clearsprings houses about 30,000 people seeking asylum across southern England, London and Wales, and subcontracts roughly half of that number into hotels, according to the BBC's investigation into the company's profits. The Home Office is closing hotels and moving people into dispersed housing. The direction of travel is deliberate and the reasoning is sound: hotels cost too much. The mechanism is where the difficulty begins.
This is not a new discovery. In June 2023 the BBC reported that councils had lost properties to a Home Office contractor paying above the local housing allowance, and that Southwark's then council leader, Kieron Williams, had said his homelessness staff "have never seen anything like this". London Councils reported that 7% of all temporary accommodation used by councils had been taken back by providers in the previous six months. Capital Letters, the agency owned by ten London boroughs, could find only 18 homes in the entire city within the limits of what housing benefit would pay. Its chief executive, Sue Coulson, said the contractor was offering about £2,000 per property more than councils could.
The Home Office's answer at the time was that it had a statutory duty to accommodate asylum seekers, and that "if there is a need for Clearsprings to go above the local housing allowance, for example to ensure we are complying with this duty, then we will let the local council know". Three years on, the practice is the same and the disclosure is no fuller.
What the contract actually says
Clearsprings Ready Homes is one of three providers, alongside Serco and Mears, holding Asylum Accommodation and Support Contracts awarded in 2019 under the previous Conservative government. When the contracts were let, the Home Office expected them to cost £4.5bn over ten years. It now expects them to cost £15.3bn.
The £7bn figure attached to Clearsprings is an estimate of the value of the ten-year contract for the South over its full term. It has risen from £0.7bn at award, a tenfold increase recorded by the Commons Home Affairs Committee. It is a projected contract value, not a sum already paid, and it should not be described as rent for any individual property. For scale, the department spent £4bn on asylum support in 2024/25, of which £2.1bn went on hotels.
The same committee recorded that each contract contains a break clause "that allows the Home Office to change or end the contract without penalty from March 2026 onwards", and recommended that the department give "urgent consideration to the practical implications of exercising" it. The committee's report does not set out the notice period or the detailed conditions attached to the clause, and no ministerial statement setting out how the option has been assessed has been published.
That leaves an unanswered question rather than a proven refusal. The Home Office has had a contractual route to change or end these arrangements since March. It has not said publicly whether it has modelled the cost of using it, what notice would be required, or why the present terms remain preferable. Given that the department's own committee described the system as expensive and poorly managed, ministers should answer all three.
The profits, the standards and the record
The accounts are public even where the contract is not. Clearsprings Ready Homes reported a pre-tax profit of £58.7m in the year to 31 January 2025 on turnover of £1.3bn, down from £120.1m the year before, according to filings at Companies House. Its parent, Clearsprings (Management), has received almost £183m in dividends since 2020. The BBC reported that the National Audit Office puts combined profits across the three providers at £383m since 2019.
The committee also found that providers have fallen short of agreed dispersal volumes by about 34,000 bedspaces, that there is no clear contractual mechanism to penalise them for doing so, and that the Home Office had applied £4m in performance penalties as of March 2025, around 1% of the profits providers had made. Two providers were said to owe millions in excess profits, with recovery only beginning in 2024.
Clearsprings has told MPs it had £32m "ready to go" back to the taxpayer and was waiting for the department to collect it. Its managing director, Steve Lakey, said the company averages a 6.9% margin on its contracts and would repay anything "just over 5%". The department has declined to publish the thresholds. The public is therefore paying a contractor whose profit-sharing terms are confidential, on a contract whose rate card is also undisclosed, to make decisions about which families get a flat.
The record on standards is not clean either. In January 2026 Clearsprings paid £140,000 to Swindon Borough Council after the council issued five financial penalties over houses in multiple occupation. The penalties were not contested and have been paid in full, and a scheduled five-day trial was avoided. The council had alleged 27 failures to comply with HMO management regulations between May and October 2022 at five properties, including fire doors that did not close properly, a bedroom that could not be opened from inside, and smoke alarms that were not working. There was no court finding and no conviction: these were civil penalties, and the company has not admitted the allegations.
That distinction should be stated plainly, and so should the point it does not remove. A company that has paid penalties over its own licensing and safety obligations is now setting refurbishment standards for other people's flats, which The Sun reports include full redecoration and new carpets, and charging the cost to the public purse.
The BBC also reported that £17m was paid to an offshore company, Bespoke Strategy Solutions, which Clearsprings says is owned by its founder and invoiced the parent company for "strategic solutions services". TaxWatch described the arrangement as highly unusual. None of this establishes wrongdoing. It does mean that assurances about value for money deserve more than a press release.
What the Home Office says
The department's response to The Sun was careful and, on its own terms, accurate. It pays "a capped and contractually agreed rate to accommodation providers", and any amount above that is "covered by the contractor and not taxpayers". It said closing hotels has saved more than £1bn on asylum support since the election, and that it has removed 80,000 people with no right to be in the UK.
The distinction between what the department pays and what the contractor offers is real, and the £4,500 should not be described as a Home Office payment. But it does not close the question. The cap is set by the department. A contractor that chooses to offer well above the local housing allowance must account for that decision somewhere within a contract worth up to £7bn, whether by accepting a thinner margin on one property, by recovering it across the wider estate, or by adjusting the mix of accommodation it supplies. Which of those applies here is not disclosed. Until it is, the assurance that the taxpayer bears no cost is a statement of contractual architecture rather than a demonstrated outcome.
The public-interest question is therefore narrow and answerable. How can taxpayers, councils and MPs assess value for money when the accommodation rates, the profit-sharing thresholds and the safeguards against displacement are not published? The department publishes neither the capped rate nor the clawback trigger. The committee could not extract them. Councils competing for the same flats cannot see them either.
Who is actually responsible
Precision matters, because the easy version of this story is wrong.
The contracts were awarded in 2019 under the Conservative government. The mechanism was operating and being publicly defended by 2023, when Suella Braverman was home secretary. The rise in the contract ceiling from £4.5bn to £15.3bn happened on the Conservatives' watch as hotel use expanded, and the committee's verdict on that period was that the department had failed to grip the contracts and had few levers to control costs.
Labour inherited the framework in July 2024. It did not design it. What it has done since is keep it, and make its output the centrepiece of border policy. The Chancellor, Rachel Reeves, set out in June 2025 a plan to end the use of asylum hotels by 2029, claiming savings of £1bn a year. Closing hotels means moving tens of thousands of people into ordinary rented housing in the same towns and cities where councils are already struggling to place homeless families.
That is a documented policy choice with a foreseeable consequence. It is not proof that ministers set out to create a bidding war, and the Southwark offer is a single reported case, not evidence of a national scheme to displace tenants. The fair criticism is narrower and stronger: a government that has made dispersal the core of its asylum accommodation strategy has not published the safeguards that would stop its contractor from outbidding the councils next door, and has not explained how it will reconcile the two duties in a housing market that cannot satisfy either.
The opposition parties have their own record to answer for. The Shadow Home Secretary, Chris Philp, called the report "a day of shame for Labour", which is a fair political attack but not a policy. The Conservative Party awarded these contracts and presided over the hotel expansion that inflated them. Robert Jenrick, who left the Conservatives for Reform UK in January 2026, said the arrangement was "everything that's wrong with broken Britain" and promised that a Reform government would end it. Neither party has published the contract terms it would impose, the rate it would pay, or how it would prevent the same competition from recurring.
The families at the end of the chain
The people who lose out are not abstractions. They are households already in temporary accommodation, sometimes in the same block, sometimes for years. They are the 177,530 children counted in March. They include families in refuges and move-on flats, and The Sun reports that Clearsprings is approaching landlords who let to students, councils and people fleeing domestic abuse, offering three-year terms as an incentive to switch.
It is important not to overstate the chain of causation. A single property offered to a contractor is not proof that a named family was made homeless, and not every asylum placement displaces a British household: the housing shortage is older and larger than the asylum system, and successive planning failures since the 2010s would have produced a crisis without a single small boat arrival. What the 2023 evidence shows is that the competition is real at the margin, and that the margin is where homeless families are housed. Councils had already agreed not to outbid each other in order to protect taxpayers. They have no equivalent agreement with the Home Office, and no visibility of the rates it pays.
It is also worth stating plainly what this story is not. It is not evidence that people seeking asylum are taking British homes. They are being housed by a contractor, under a statutory duty, in properties the state pays for. The anger belongs with the terms of the contract and the ministers who signed, extended and now administer it. Criminal damage to suspected HMOs, including dozens of incidents reported in Salford this month, some involving properties that were wrongly identified, does nothing to house a British family and puts vulnerable people at risk.
The wider numbers explain the pressure without excusing the design. Around 33,000 people arrived by small boat in the year to June 2026, down from 41,000 in 2025 and a peak of 46,000 in 2022, with about 205,000 detected since 2018. Some 95% claim asylum. Each becomes an accommodation duty while the claim is processed. Britain has built an asylum system that depends on private landlords and a housing system that no longer builds enough homes for the people already here. The bill arrives in the same three-bedroom flats.
Great British PAC reaction
Claire Bullivant, Chief Executive Officer of Great British PAC, said:
“This is an absolute disgrace and yet another example of the two-tier Britain that hardworking families are being forced to endure.
“While British parents struggle to keep a roof over their children's heads, young couples are priced out of the housing market and councils are desperately trying to find homes for vulnerable families, a Home Office contractor is reportedly offering more than double the rent a council is paying for the very same property. How can anyone in government possibly defend that?
“We have a situation where Southwark Council is paying £1,790 a month to house a family, while a contractor working within the Government's asylum accommodation system reportedly offered £4,500 for that same home, with bills, council tax and maintenance covered. The landlord, to his enormous credit, refused.
“This is the reality of Labour's two-tier Britain. Ordinary families are expected to tighten their belts, pay ever-increasing taxes and somehow make ends meet, while the asylum accommodation system operates with financial incentives that councils simply cannot match.
“Labour ministers talk endlessly about fairness, but where is the fairness for the British family waiting for a home? Where is the fairness for the young couple who have worked hard, paid their taxes and cannot afford somewhere to live? Where is the fairness for the pensioner struggling to pay the bills while billions are being committed to this system?
“And what makes this even more extraordinary is that taxpayers are effectively funding both sides of the competition. Their money supports councils trying to house homeless families, while Home Office contracts enable private companies to compete for properties in the very same housing market. It is bureaucratic madness on an industrial scale.
“Labour has been in government for more than two years. Ministers cannot keep offering excuses while the consequences of their decisions fall on ordinary communities. They are responsible for overseeing these contracts, ensuring taxpayers receive value for money and preventing their asylum accommodation policies from making an already desperate housing crisis worse.
“Britain is a generous and compassionate country, but compassion must never become an excuse for abandoning common sense, financial responsibility or fairness to the people who fund our public services.
“Great British PAC is demanding full transparency over these contracts, proper safeguards for councils and an urgent independent review of whether taxpayers are receiving value for money.
“The British people are entitled to expect that their government puts their interests at the heart of its decisions. Theyshould not be forced to watch their own taxes finance a housing bidding war that risks leaving vulnerable families without somewhere to live.
“Labour promised change. Instead, British families are still waiting, taxpayers are still paying, and the contractors are still operating under a system whose financial arrangements remain hidden from public scrutiny.
“This is not fairness. It is not responsible government. It is two-tier Britain, and it has to stop.”
1. Full contract transparency. The department should disclose sufficient information about accommodation rates, profit-sharing arrangements and procurement safeguards to permit meaningful public scrutiny, subject to legitimate legal and commercial restrictions. Without the capped rate and the clawback threshold, neither Parliament nor councils can test the claim that taxpayers bear no cost above the cap.
2. Protection for council housing procurement. Safeguards should prevent Home Office-funded accommodation procurement from unnecessarily displacing local authorities seeking properties for homeless families. At a minimum, councils should be told when a contractor bids above the local housing allowance in their area, and the department should publish how many properties have moved from council use into asylum accommodation.
3. Independent value-for-money review. An independent assessment should examine whether the existing asylum accommodation contracts deliver value for taxpayers, including the effect of rental competition on councils, the cost of the 34,000-bedspace shortfall against agreed volumes, and whether performance deductions are set at a level that changes behaviour.
4. Review of the break clause. Ministers should explain whether the available contractual options, including termination, renegotiation or replacement, have been assessed, what notice and conditions apply, and why the present arrangements remain appropriate when the department's own committee has described them as expensive and poorly managed.
5. Ministerial accountability. The Home Office should explain how it intends to reduce asylum accommodation costs without transferring additional financial pressure onto councils and vulnerable families, and should publish the modelling behind its claim that ending hotel use by 2029 will save £1bn a year.
Two public budgets. One housing crisis.
Return to the flat in Southwark. One landlord was offered two prices for the same three bedrooms: £1,790 a month from the council, £4,500 from the contractor. He chose the lower one and kept a family in their home. The difference between the two headline monthly offers amounts to £32,520 a year, before accounting for the different costs and contractual terms.
Other landlords may make a different choice when offered substantially higher rents. The incentives point the other way, and no one in government has designed a system in which they do not. That is the finding that matters, and it does not depend on this one property or this one landlord. Two public budgets are chasing the same homes, one of them can name its price, and the other is capped by a formula set in Whitehall. The council that loses has a legal duty to house a family it can no longer place. The contractor that wins has a contract, a margin and no duty to that family at all.
Great British PAC's argument is not that asylum seekers should go unhoused, and it is not that profit is improper. It is that public money should not be spent in a way that makes the state a competitor to itself. If the department's rates are fair, it should publish them. If its safeguards work, it should show them. If the contract no longer represents value for money, ministers must explain whether exercising the break clause would deliver a better outcome for taxpayers. Taxpayers are entitled to an answer on each, and the families in temporary accommodation are entitled to a housing system that does not treat them as the losing bidder in a contest the government created.