. . . which in the opinion of politics observers and of his supporter may well presage his entry into 10 Downing Street, either by acclaim in a coronation or in a Labour Party leadership contest with the incumbent PM Sir Keir Starmer with all the potential for a typically Labour fratricidal struggle that comes with such terrain, I find the subject of this article, namely the involvement of outsourcing companies with the accommodation of asylum seekers. For tackling the extent of and the hollowing out of the British state to the outsourcing sector will have to be high on Burnham’s agenda for change; to rebalance the relationship between the state and the citizen and to roll back, in his words, “the failed forty-year neoliberal experiment.” Doing this will hopefully help to lance the boil of resentment and perceived sense of injustice around the housing of migrants.
For, arguably the biggest driver of anger around immigration and hostility towards, in particular, recently arrived migrant and/or asylum-seeking communities is the effect on local housing stock. Toxic narratives are ten a penny about the alleged provision of full board, lodging, and welfare benefits to young men of “fighting age” from “alien cultures" in hotels and Houses of Multiple Occupancy (HMOs) in areas of deprivation where there acute shortages of affordable housing.
For, arguably the biggest driver of anger around immigration and hostility towards, in particular, recently arrived migrant and/or asylum-seeking communities is the effect on local housing stock. Toxic narratives are ten a penny about the alleged provision of full board, lodging, and welfare benefits to young men of “fighting age” from “alien cultures" in hotels and Houses of Multiple Occupancy (HMOs) in areas of deprivation where there acute shortages of affordable housing.
The last three summers have seen demonstrations about the accommodation of asylum seekers in these sites and also in disused military barracks; some protestors have genuine concerns about the integration of these new arrivistes in their communities and of the sheer ennui of the conditions of their temporary residence. For others, the motivations are xenophobic and racist as is shown by the presence of far-right agitators such as Tommy Robinson other groups further to his right such as Britain First, the white supremacist Homeland Party and the neo-Nazi Patriotic Alternative. And, unfortunately, riots have been sparked by the convictions of asylum seekers for crimes, such as the murder of a hotel worker by a Sudanese national in Walsall in the West Midlands in October 2024 and the sexual assault of a 14 year-old girl in Epping by an Afghan national resident in the Bell Hotel three in 2025 and by events such as the attempted murder of a Belfast man by a Sudanese national captured in such horrific social media images a fortnight ago, and the Southport killings in August 2024. These disturbances, or pogroms, have of course been exacerbated by bad actors online who through their wilful dissemination of misinformation have sought to pour accelerant on the flames. Because lies and wilful ignorance has so often been the currency of debate over immigration and asylum, it is the aim of this article to shed some factual light on exactly how asylum seekers and migrants are housed. I aim to show the outsourcing of the running of asylum accommodation to private facilities companies such as Serco is a metaphor for the hollowing out of the British state; for the stark reality that, in the words of Anoosh Chakelian in her New Statesman article on the political temperature in the Greater Manchester satellite town of Wigan in the context of the Makerfield by-lection, the state has neither the capacity nor the political capital to build, buy or rent out specific asylum housing itself, and nor do councils. For her, the Home Office has been a “basket case,” that in the words of insiders with knowledge of the issue, “doesn’t know what to do” about the failing accommodation system and “isn’t doing anything about it,” despite all the official clamour about wishing to close the hotels.[1]
In her tour of the Makerfield constituency and especially Wigan its biggest town, Chakelian points to Darlington Street, a long road of redbrick terraces to house the major battalions of industrial England, mill worker, and miners, leading into Wigan town centre, as an archetypal symbol of Britain’s woes. For Darlington Street and its offshoots are believed locally to have Britain’s highest concentration of Serco run and other HMOs (Houses of Multiple Accommodation) Serco is one of the private outsourcing companies with a government contract to rent them out to asylum seekers. Serco leases houses from private landlords and runs them on their behalf. Chakelian reports being told that some landlords receive between £1,000 and £2,000 a month in rent on these properties, depending on number of bedrooms, location, and condition. This money comes from the Home Office, which agreed ten-year contracts to outsource the accommodation of asylum seekers in hotels and houses to Serco and two other firms: Clearsprings and Mears.[2]
The statistics tell the story of a very dysfunctional set up. There are 93,653 asylum seekers housed in Home Office asylum accommodation in the UK, around 22 per cent of whom are in hotels, some of which Serco runs. The hotels coast around £170 a night per person, compared with £14 per night on average in an HMO. Since closing the hotels is a priority for the government due to their roles as flashpoints for local discontent, the number of dispersals to houses has quietly risen annually – there are now 68,719 in tens of thousands of houses across the country. But with the number of irregular arrivals, 43,806 in the year ending March 2026, this number will continue to swell. A typical Serco HMO contract offers a seven-year lease with a one-year break [3] clause, and includes “monthly property inspections, council tax and utilities paid,” “no call-out payments to contractors,” no management, legal restriction, or set-up fees, and “day-to-day maintenance and repairs undertaken at no cost to the landlord.” The landlord is responsible for structural repairs and fundamentals such as pipework. No wonder, one landlord with HMOs in Norfolk has described Serco as “the fairy godmother.”[4]
On top of this, some property investors are buying up cheap properties, contracting them with Serco then advertising them to cash buyers as attractive investment opportunities with guaranteed steady rent. Anoosh Chakelian cites one property investor promising as high as 10.5 per cent returns on cheap housing for as little as £148,600. Landlords have also added to the perception of migrants being prioritised for housing by kicking out existing tenants (before the recent prohibition of no-fault evictions) in order to rent to Serco instead. All of this forms part of the picture portrayed by the Wigan MP and Culture Secretary Lisa Nandy to Anoosh Chakelian while out door knocking for the eventually victorious Andy Burnham, “you’re often on a road where every other house been taken up as an HMO” – for asylum seekers, as well as for other housing schemes for ex-offenders, drug addicts and the homeless. “Because the properties are cheaper, they all target the same areas,” Nandy says, which drives up rents. According to her, her constituents now feel part of “a very transient community,” where they don’t know their neighbours, new people keep arriving, “and a lot of social problems [are] concentrated in one area.”[5].
That one vignette speaks to the progressive degradation of public and community spaces and the resultant seething discontent, cynicism and hopelessness that is so prevalent in affected areas such as Wigan. It speaks volumes of the lack of capacity of the central state and of local authorities to tackle systematic blockages such as public housing and its necessary accompanying infrastructure. In his review of Sam Freedman’s book Failed State: Why Britain Doesn’t Work and How We Can Fix It, Steve Conley runs the ruler over Freedman’s central claim: that decades of over-centralisation and reckless outsourcing, have hollowed out the state, leaving public services expensive, inefficient, and unaccountable. By centralisation, Freedman explains that because successive governments have stripped local councils of powers and funding, making communities dependent on Whitehall. In what he describes as the “Outsourcing Trap,” Freedman describes how from the 1980s, core municipal services once provided in-house were forced into the market. Refuse collection, cleaning and – most disastrously children’s homes – were handed to private contractors. Today, three quarters of residential care homes are run by private equity firms, charging councils up to £6,000 per child per week while making double digit profits. Vulnerable children are often displaced hundreds of miles from family networks, with damaging consequences.[6]
Freedman sets three competency tests for outsourcing: real competition, measurable outcomes, and the shift of risk to the provider. Where these conditions are absent, as has happened in children’s care, probation, and security to name three of the most blatant examples, outsourcing is doomed with sometimes catastrophic consequences as in the aforementioned trio. Yet the same conglomerates keep winning contracts despite repeated scandals involving Serco, G45, Atos and others.[7] Serco, in particular, is so integral to the British state that Margaret Hodge ,the Labour politician and former Chair of the Commons Public Accounts Committee who led an investigation into Serco, has called it “too big to fail", because, “there are too many services that would collapse” if it went bankrupt. This despite the Serious Fraud Office investigation into Serco over a multimillion-pound fraud and false accounting, overcharging to tag criminals who didn’t exist which led to a fine of £19.2m for Serco (and the eventual clearing of bosses for fraud).[8]
This frank admission by Margaret Hodge speaks volumes about the democratic deficit that swirls around outsourcing. Parliament struggles to hold the executive to account while governments chase headlines in the 24-hour news cycle. The result is a state run by media reaction, not coherent planning. The weakening of British institutions by privatisation and short-termism has made it easier for poor leaders (and bad actors like former No 10 Chief of Staff Dominic Cummings) to stick to easy, technocratic fixes (which the likely outgoing PM Starmer has often been berated for) rather than embarking on the necessary structural reform of the UK’s fractured state without which it will continue to be locked into a circle of dependency on private profiteers and weak accountability with possibly terminal effects on democracy.
To return to Makerfield for the last time, Anoosh Chakelian gives a necessary corrective to the “luxury hotels” falsehoods spread by the far right. There were nearly 5,000 complaints against asylum contractors escalated to the Home Office between 2022 and 2025, including payments issues, “property suitability”, food not meting the legal standards, and staff behaviour towards asylum seekers, according to documents she obtained via a Freedom of Information request. Serco featured in 1,816 of the 4,962 complaints escalated, surpassed only by Clearsprings’ 1.975. She cites a former Serco hotel worker at the Metropole Hotel in Blackpool who blew the whistle to the online publication the Lead last year on “terrible conditions” at the hotel, including collapsing ceilings and raw sewage leaks.[9]
Chakelian also comments on the experiences of those at the sharp end of Serco services – asylum seekers, immigration detainees, people wearing GPS ankle tags when on immigration bail. Hana, an Albanian airport worker who was tricked by a gang into slave labour on a cannabis farm in England, says she was made by Serco to feel “like I was the criminal” when detained. Mariam, now a trafficking campaigner, said her own experience of being detained as a trafficking victim (while her victors walked free) has given her “lasting trauma” – feeling haunted when she hears keys jangle, and when she sees a Serco escort van in public.[10]
Thus outsourcing has served as multiple lightening rods for dissatisfaction at the malfunctioning of the British state which when mixed with populist sentiment on immigration has created toxic environments in many parts of the Sceptred Isle. It must be a priority for PM Burnham (or whoever succeeds Keir Starmer) to start rebalancing and transforming the state through the devolution of power and decision making back to communities; a shift in the organisational culture of public services from profit maximisation to citizen stewardship; the rebuilding of in-house capacity to deliver them and the creation of public trust through transparency; long-term planning and hybrid public-private innovations.[11] Otherwise Labour or even British democracy could be drinking in its last chance saloon.
In her tour of the Makerfield constituency and especially Wigan its biggest town, Chakelian points to Darlington Street, a long road of redbrick terraces to house the major battalions of industrial England, mill worker, and miners, leading into Wigan town centre, as an archetypal symbol of Britain’s woes. For Darlington Street and its offshoots are believed locally to have Britain’s highest concentration of Serco run and other HMOs (Houses of Multiple Accommodation) Serco is one of the private outsourcing companies with a government contract to rent them out to asylum seekers. Serco leases houses from private landlords and runs them on their behalf. Chakelian reports being told that some landlords receive between £1,000 and £2,000 a month in rent on these properties, depending on number of bedrooms, location, and condition. This money comes from the Home Office, which agreed ten-year contracts to outsource the accommodation of asylum seekers in hotels and houses to Serco and two other firms: Clearsprings and Mears.[2]
The statistics tell the story of a very dysfunctional set up. There are 93,653 asylum seekers housed in Home Office asylum accommodation in the UK, around 22 per cent of whom are in hotels, some of which Serco runs. The hotels coast around £170 a night per person, compared with £14 per night on average in an HMO. Since closing the hotels is a priority for the government due to their roles as flashpoints for local discontent, the number of dispersals to houses has quietly risen annually – there are now 68,719 in tens of thousands of houses across the country. But with the number of irregular arrivals, 43,806 in the year ending March 2026, this number will continue to swell. A typical Serco HMO contract offers a seven-year lease with a one-year break [3] clause, and includes “monthly property inspections, council tax and utilities paid,” “no call-out payments to contractors,” no management, legal restriction, or set-up fees, and “day-to-day maintenance and repairs undertaken at no cost to the landlord.” The landlord is responsible for structural repairs and fundamentals such as pipework. No wonder, one landlord with HMOs in Norfolk has described Serco as “the fairy godmother.”[4]
On top of this, some property investors are buying up cheap properties, contracting them with Serco then advertising them to cash buyers as attractive investment opportunities with guaranteed steady rent. Anoosh Chakelian cites one property investor promising as high as 10.5 per cent returns on cheap housing for as little as £148,600. Landlords have also added to the perception of migrants being prioritised for housing by kicking out existing tenants (before the recent prohibition of no-fault evictions) in order to rent to Serco instead. All of this forms part of the picture portrayed by the Wigan MP and Culture Secretary Lisa Nandy to Anoosh Chakelian while out door knocking for the eventually victorious Andy Burnham, “you’re often on a road where every other house been taken up as an HMO” – for asylum seekers, as well as for other housing schemes for ex-offenders, drug addicts and the homeless. “Because the properties are cheaper, they all target the same areas,” Nandy says, which drives up rents. According to her, her constituents now feel part of “a very transient community,” where they don’t know their neighbours, new people keep arriving, “and a lot of social problems [are] concentrated in one area.”[5].
That one vignette speaks to the progressive degradation of public and community spaces and the resultant seething discontent, cynicism and hopelessness that is so prevalent in affected areas such as Wigan. It speaks volumes of the lack of capacity of the central state and of local authorities to tackle systematic blockages such as public housing and its necessary accompanying infrastructure. In his review of Sam Freedman’s book Failed State: Why Britain Doesn’t Work and How We Can Fix It, Steve Conley runs the ruler over Freedman’s central claim: that decades of over-centralisation and reckless outsourcing, have hollowed out the state, leaving public services expensive, inefficient, and unaccountable. By centralisation, Freedman explains that because successive governments have stripped local councils of powers and funding, making communities dependent on Whitehall. In what he describes as the “Outsourcing Trap,” Freedman describes how from the 1980s, core municipal services once provided in-house were forced into the market. Refuse collection, cleaning and – most disastrously children’s homes – were handed to private contractors. Today, three quarters of residential care homes are run by private equity firms, charging councils up to £6,000 per child per week while making double digit profits. Vulnerable children are often displaced hundreds of miles from family networks, with damaging consequences.[6]
Freedman sets three competency tests for outsourcing: real competition, measurable outcomes, and the shift of risk to the provider. Where these conditions are absent, as has happened in children’s care, probation, and security to name three of the most blatant examples, outsourcing is doomed with sometimes catastrophic consequences as in the aforementioned trio. Yet the same conglomerates keep winning contracts despite repeated scandals involving Serco, G45, Atos and others.[7] Serco, in particular, is so integral to the British state that Margaret Hodge ,the Labour politician and former Chair of the Commons Public Accounts Committee who led an investigation into Serco, has called it “too big to fail", because, “there are too many services that would collapse” if it went bankrupt. This despite the Serious Fraud Office investigation into Serco over a multimillion-pound fraud and false accounting, overcharging to tag criminals who didn’t exist which led to a fine of £19.2m for Serco (and the eventual clearing of bosses for fraud).[8]
This frank admission by Margaret Hodge speaks volumes about the democratic deficit that swirls around outsourcing. Parliament struggles to hold the executive to account while governments chase headlines in the 24-hour news cycle. The result is a state run by media reaction, not coherent planning. The weakening of British institutions by privatisation and short-termism has made it easier for poor leaders (and bad actors like former No 10 Chief of Staff Dominic Cummings) to stick to easy, technocratic fixes (which the likely outgoing PM Starmer has often been berated for) rather than embarking on the necessary structural reform of the UK’s fractured state without which it will continue to be locked into a circle of dependency on private profiteers and weak accountability with possibly terminal effects on democracy.
To return to Makerfield for the last time, Anoosh Chakelian gives a necessary corrective to the “luxury hotels” falsehoods spread by the far right. There were nearly 5,000 complaints against asylum contractors escalated to the Home Office between 2022 and 2025, including payments issues, “property suitability”, food not meting the legal standards, and staff behaviour towards asylum seekers, according to documents she obtained via a Freedom of Information request. Serco featured in 1,816 of the 4,962 complaints escalated, surpassed only by Clearsprings’ 1.975. She cites a former Serco hotel worker at the Metropole Hotel in Blackpool who blew the whistle to the online publication the Lead last year on “terrible conditions” at the hotel, including collapsing ceilings and raw sewage leaks.[9]
Chakelian also comments on the experiences of those at the sharp end of Serco services – asylum seekers, immigration detainees, people wearing GPS ankle tags when on immigration bail. Hana, an Albanian airport worker who was tricked by a gang into slave labour on a cannabis farm in England, says she was made by Serco to feel “like I was the criminal” when detained. Mariam, now a trafficking campaigner, said her own experience of being detained as a trafficking victim (while her victors walked free) has given her “lasting trauma” – feeling haunted when she hears keys jangle, and when she sees a Serco escort van in public.[10]
Thus outsourcing has served as multiple lightening rods for dissatisfaction at the malfunctioning of the British state which when mixed with populist sentiment on immigration has created toxic environments in many parts of the Sceptred Isle. It must be a priority for PM Burnham (or whoever succeeds Keir Starmer) to start rebalancing and transforming the state through the devolution of power and decision making back to communities; a shift in the organisational culture of public services from profit maximisation to citizen stewardship; the rebuilding of in-house capacity to deliver them and the creation of public trust through transparency; long-term planning and hybrid public-private innovations.[11] Otherwise Labour or even British democracy could be drinking in its last chance saloon.
References
[1] Anoosh Chakelian - The failed state. How Britain outsourced its politics – and lost control. The New Statesman. 12-18 June 2026 pp.21-27
[2] Ibid, pp.21-22
[3]
[4] P.22
[5] Pp.21-22
[6] Steve Conley. How Britain Outsourced Its Way Into Failure. Academy of Life Planning 19 August 2025
[7] Ibid
[8] Chakelian p.24
[9] Ibid, p.25
[10] Pp.25-26
[11] Conley, op cit
⏩Barry Gilheany is a freelance writer, qualified counsellor and aspirant artist resident in Colchester where he took his PhD at the University of Essex. He is also a lifelong Leeds United supporter.
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