Written evidence submitted by Coventry City Council (AAC0027)

Key messages

• Coventry is disproportionately accommodating asylum seekers, well beyond its allocated Full Dispersal Plan, the highest in the West Midlands, placing significant strain on local services.
• Despite the Government's commitment to a full dispersal programme involving all Local Authorities in accommodating asylum seekers, its implementation has failed to materialise.
• The asylum accommodation system is inequitable, inflexible to surges, and overly reliant on market-driven procurement.
• The Home Office's top-down approach undermines local governance, with contingency accommodation decisions made without prior consultation with local authorities.
• The contractual framework inflates the cost of private rental accommodation, creating competition between local authorities and the wider housing market.
• A lack of coordinated exit strategies and insufficient move-on support for refugees’ damages integration efforts and places additional pressure on local housing and homelessness services.

Introduction

Coventry City Council has supported asylum seekers, refugees, and migrants for over two decades and welcomes this inquiry addressing a pressing issue.

Based on our experience, there is a concerning trend by the Home Office towards an increasing reliance on accommodating people seeking asylum in legacy authorities – (local authorities in the West Midlands, such as Coventry, that have historically been responsible for housing and providing welfare support for asylum seekers).

While we appreciate the Home Office’s commitment to delivering “equitable” dispersal of asylum seekers through the Full Dispersal Plan, we remain concerned about the lack of tangible evidence that it is being implemented effectively. To date, little progress has been made in ensuring asylum seekers are equitably dispersed through Home Office-contracted AASC providers to local authorities that have not previously hosted them. This has left legacy authorities like Coventry bearing a disproportionate share of the burden placing significant strain on local services, and community cohesion.

Context
Coventry City Council is currently accommodating asylum seekers at 273.8% of its allocation under the Full Dispersal Plan, the highest rate in the West Midlands and one of the most disproportionate in the UK. As of September 2024, Coventry ranks fifth out of 350 local authorities for asylum accommodation.

Historically a voluntary dispersal area, Coventry’s support for asylum seekers is being strained by the inequitable implementation of the Full Dispersal Plan. The city’s accommodation total of 2,156, including contingency bedspaces, reflects systemic failures in the dispersal system and inadequate accommodation in other areas.

Despite a pause in new procurement in September 2023, the number of asylum seekers continues to grow due to estate optimisation, placing increased pressure on local services and community integration.

The Council calls for a fair asylum system, urging the Home Office to reduce Coventry’s burden, end contingency hotels, prioritise under-accommodated areas, and provide adequate resources.

Coventry remains dedicated to supporting asylum seekers and is committed to working with the Home Office to improve the system so that it is fair, sustainable, and fit for purpose. This submission responds to the Home Affairs Committee's call for evidence on asylum accommodation.

1. The Delivery of Asylum Accommodation

1.1 Contract Management and Response to Demand

Coventry City Council’s experience with the Home Office’s asylum accommodation procurement and management has exposed several systemic issues, particularly in relation to contract management and response to demand. The current system is inequitable and inconsistent, leaving Coventry disproportionately impacted by asylum dispersal policies.

Failure of Equitable Dispersal Policies

Despite the Home Office's longstanding commitment to equitable dispersal, which aims to ensure that asylum seekers do not exceed 0.5% of the population in any area, Coventry has consistently exceeded this limit. As of January 2025, the city was accommodating asylum seekers at 124.6% of the agreed “1:200 cluster limit,” which is significantly higher than many other local authorities. For comparison, Coventry is hosting 273.8% of its agreed allocation, while other areas are either under-allocated or have not yet reached their dispersal targets. Coventry has the highest rate of the 30 authorities in the West Midlands.  Most authorities have far lower rates, with many in single figures and some with a rate of 0%.

This disparity in management of asylum accommodation across the country highlights a failure in the equitable dispersal policy that should be guiding the Home Office's decisions.

Inflexible Procurement Framework and Contingency Arrangements

The Home Office's procurement framework lacks the flexibility necessary to manage sudden surges in demand for accommodation, which leads to the increased use of contingency arrangements, such as hotels. Coventry currently accommodates asylum seekers in three hotels, two of which have been in use since 2019, making their status far from temporary. The reliance on hotels as accommodation, particularly for extended periods, has become the norm and a persistent challenge.

Lack of Coordination and Respect for Local Governance

The process by which the Home Office establishes Contingency Accommodation undermines the role of local authorities in managing asylum accommodation capacity and mitigating the impact on public services. This reflects a top-down approach to decision-making. The practice of opening hotels for use without prior consultation with the council, along with communication of such decisions less than 48 hours in advance, significantly limits our ability to respond proactively and effectively. This approach highlights a lack of coordination, respect for local governance, and consideration for areas already disproportionately affected by high numbers of asylum seekers.

Over-Reliance on Market-Driven Procurement

The Home Office is continuing to send a disproportionate number of asylum seekers to Coventry, rather than directing contractors to procure accommodation in other areas, including those with available housing or in need of additional dispersal. This over-reliance on market-driven procurement, which often focuses on lower-cost housing in cities like Coventry, adds to local deprivation and strains public services, leading to community tensions.

It raises concerns about AASC provider’s prioritising financial considerations over the need for a fairer geographical distribution.

Maintain and Replace Policy Ineffectiveness

Under the new plans, authorities that have reached 100% of their allocation are placed under the "Maintain and Replace" policy, which pauses the procurement of additional Dispersed Accommodation. Providers are required to maintain existing service levels and procure like-for-like replacements for bedspaces lost due to hand backs or declining quality.

However, the policy has been inconsistently applied. Despite the procurement pause in September 2023, Coventry’s estate has grown by 231 bedspaces. The Home Office attributes this to "estate optimisation" rather than new procurement but has not provided transparency on the estate size at the time of the pause.

This lack of clarity undermines the policy’s intent. Rather than reducing bedspaces to align with Coventry’s surpassed allocation, "estate optimisation" is being used to justify further increases as the number of accommodated individuals continues to rise.

Inflation of Accommodation Costs

The current contractual framework inflates the cost of private rental accommodation. Our understanding is the deal offered by Serco in Coventry often includes additional benefits, leading to costs that are higher than market rates. This has created competition between local authorities and the wider housing market, further increasing the challenges Coventry faces in addressing the housing needs of its residents, while managing the accommodation needs of asylum seekers. Temporary accommodation numbers have more than doubled in Coventry over the last 2 years with the ability to secure private rented accommodation at affordable prices virtually impossible.

1.2 Provider Performance Assessment

Accommodation Identification and Delivery

Inequitable Accommodation Procurement

The current accommodation provider has not secured appropriate housing across the West Midlands in a fair and equitable manner. This has led to poorly managed dispersal, resulting in a disproportionate concentration of asylum seekers in deprived areas of Coventry. Such imbalances undermine social cohesion and strain local resources.

Impact on Local Housing Markets

The contracts awarded to providers inflate the cost of accommodation, as offers made by Serco in Coventry are significantly higher and include additional benefits that landlords would not secure through other sources. This creates increased competition for local authorities, who are already operating in the same housing market to meet the broader needs of the city’s population.

Unified Approach to Accommodation

There should no longer be a distinction between Asylum Dispersal accommodation, Initial accommodation and Contingency accommodation. The length of stay, s95 status, discontinuation from hotels, and the associated risks and responsibilities placed on local authorities are effectively the same.

Lack of Strategic Exit Planning

Neither the Home Office nor Serco has shown any intention of recognising local pressures or valuing the Full Dispersal Regional Plan. There is no clear exit strategy for the contingency hotels currently operating in Coventry since 2019. To ensure fairness, a structured plan should be implemented whereby the first hotel opened in a region is also the first to close. Such an approach would demonstrate responsible management and foster public trust.

Unsuitability of Privatised Institutional Accommodation

The long-term solution cannot lie in expanding privatised, accommodation managed by commercial operators. Bloc-style housing with shared facilities may benefit contractors by leveraging economies of scale to maximise profits, but it is not a sensible or sustainable policy for asylum seekers or local communities. These accommodation contracts shift financial risks from providers to the Home Office, distancing both contractors and the government from the realities faced by local authorities, whose concerns are often disregarded.

An Unbalanced and Unfair Dispersal System

The asylum dispersal system remains fundamentally unbalanced, with no shared responsibility across the country. Cities like Coventry have shouldered the heaviest burden of welcoming asylum seekers into their communities. The flaws in the dispersal system were evident for a long time stemming from the Home Office’s refusal to provide funding, accountability, and oversight powers to the areas bearing the greatest responsibility.

Parallel Public Service Run by Commercial Body

The current asylum accommodation system is largely operated as a parallel public service, run by commercial contractors within local private housing markets and hotels. This approach ignores the significant impact on local authorities, fails to address the root causes of destitution for those refused or granted asylum, and overlooks the need for a collaborative, well-funded, and accountable system.

By addressing these systemic issues, the Home Office can foster greater equity and sustainability in the asylum accommodation system, ensuring it works in partnership with local authorities and better serves both asylum seekers and host communities.

1.3 Stakeholder Engagement

Stakeholder engagement remains misaligned with the Home Office's commitment to a fair and place-based dispersal plan. Serco continues to procure properties without considering local concerns, evidence, or risks highlighted by the council, disregarding the regional plan.

Governance meetings have failed to produce meaningful outcomes. Data on Dispersed Accommodation is often shared only during or just before meetings, limiting effective planning. The Home Office frequently deflects responsibility to other teams or provides vague assurances without clear resolutions, undermining trust and accountability.

Despite repeated concerns raised by Coventry City Council, including formal letters to the Home Secretary and Ministers, the Home Office and Serco have yet to provide satisfactory responses or solutions.

1.4 Safeguarding and Welfare

While safeguarding protocols have improved, significant gaps remain in identifying and addressing vulnerabilities. The Home Office now only shares information on vulnerabilities, not risks, leading to cases where concerns are inadequately addressed and requiring local intervention. The Home Office’s safeguarding team focuses on complex cases, leaving low-medium level issues unaddressed, which strains local frontline services.

Mental health support is insufficient, with limited access to specialist services and a focus on complex cases, while everyday needs are overlooked. Hotel accommodation, often located far from the city centre, can isolate asylum seekers, further worsening mental health issues.

Vulnerable groups, particularly women, are not consistently referred to appropriate services, prompting the Council to divert unfunded resources to provide support. Conditions in some properties, especially Houses in Multiple Occupation (HMOs), contribute to anti-social behaviour and strain community relations. Hotels away from the city centre also create logistical challenges, hindering access to essential services and burdening local resources.

The current system places individuals in long-term, isolated accommodation without sufficient support, increasing safeguarding risks and hindering integration. Coventry City Council has taken proactive steps, such as retaining Local Authority Asylum Seeker Liaison Officers (LAASLOs), but these efforts require sustainable funding to be effective.

Addressing these safeguarding and welfare challenges requires systemic changes, better communication, and adequate funding for services to ensure a more integrated and supportive approach to asylum seeker needs.

1.5 Data Management

Information sharing between providers and local authorities remains inconsistent, with key data on occupancy rates, support needs, and demographics often delayed or incomplete. Unreliable forecasting for discontinuations further hinders effective planning and timely support for those in need. Additionally, the lack of data on asylum seekers receiving negative decisions while residing in a local authority area leaves no opportunity to provide support, increasing the risk of exploitation or entry into the black economy.

2. Impact on Local Areas

2.1 Regional Distribution

For legacy authorities like Coventry, the impact of the asylum accommodation system has been particularly intense. The Home Office's approach—allocating the bulk of resources to private contractors while operating a system with no flexibility—has resulted in significant challenges.

This has blurred the lines between settled dispersal, initial accommodation, and contingency hotels. Coventry, as one of the historic dispersal areas, continues to bear the brunt of these systemic failings, particularly due to the failure of the Home Office to conduct a burdens assessment to address the real costs. Confidence in the dispersal system has eroded further, with increasing numbers of asylum seekers being accommodated in contingency arrangements—a trend that shows no signs of slowing.

• Coventry has seen a significant increase in asylum accommodation compared to neighbouring authorities. Five local authority areas have exceeded 170% of the Full Dispersal regional plan, with Coventry the highest out of the 30 regional authorities. As of September 2024, Coventry was ranking 5th highest out of 350 authorities across England, Scotland, and Wales. Meanwhile, the majority of authorities remain far below 100%, with 140 authorities at 5% or less, and 63 at 0%.
• The current distribution model does not adequately address local housing pressures or community integration capacity. The Home Office has overlooked the distinct and diverse needs of individual areas, failing to account for the varying levels of impact across local authorities.
• Local authorities disproportionately impacted, like Coventry, should follow a 'First Up, First Down' pathway with clear timelines to expedite hotel exits and decant properties. This would ensure a more equitable distribution and alleviate pressure on overstretched areas.
• Despite the pause in new procurement, Coventry continues to see increases in accommodated service users. The Home Office has justified this under the guise of “estate optimisation,” but this approach lacks transparency and misrepresents the reality, further straining already overburdened resources.

A more balanced and transparent system is essential to ensure fair regional distribution and to restore confidence in the asylum accommodation system.

2.2 Local Authority Engagement

Consultation on new accommodation locations remains inadequate, with notice periods often limited to just weeks. Additionally, the resource implications for local services are not properly considered when making placement decisions. Financial support from central government does not fully cover the additional burdens placed on local services, and the Burdens Assessment that was supposed to take place has never been implemented. The asylum dispersal funding provided to Local Authorities fails to reflect the disproportionate impact on local authorities like Coventry.

In summary the Home Office has consistently eroded the role of local authorities in the asylum dispersal system through:

a)      the commercial outsourcing of asylum accommodation

b)      a failure to invest in local communities, absence of robust oversight, and accountability mechanisms

c)       unreliable forecasting and decision-making

d)      a disregard for maintaining positive relations with local governments

e)      the frequent reliance on temporary accommodation when numbers increase.

The Home Office has failed to establish transparent systems to monitor accommodation standards, track service delivery, or hold providers accountable for failures.

2.3 Impact on Local Services

Coventry has been a proud asylum dispersal area for over 20 years, welcoming refugees from around the world. However, the city also faces significant deprivation and health inequalities, and the ongoing strain caused by the Home Office's failure to adhere to agreed asylum allocations has exacerbated these challenges.

The impact on local resources is severe:

• Housing demand has surged, driving up private rental costs by 17% between 2019/20 and 2022/23. The Guardian reported that Coventry had seen a 20% increase in PRS rents during 2023/24 - the 2nd highest in England. Landlords, drawn to Home Office contracts, worsen homelessness and affordability issues.
• Healthcare services, including GP practices, are overstretched, struggling with high patient numbers, language barriers, and insufficient resources to address trauma-related complex needs.
• Schools face difficulties addressing the needs of children with limited English proficiency, compounded by a shortage of available school places.
• The year-on-year increase in NRPF (No Recourse to Public Funds) children has intensified pressure on local services, with rising accommodation costs fully borne by Children's Services and growing demands on education, health, and social support resources.
• Concentrated asylum accommodation has heightened community tensions and increased demand for policing, with some areas exceeding 350% of the 1:200 cluster limit.

Additionally, the Home Office's failure to implement a burdens assessment has left local services underfunded, exacerbating the strain on Coventry’s resources.

2.4 Move-on Support

Coventry has seen a significant rise in asylum seekers receiving discontinuation notices, averaging 100 per month due to the Streamlined Asylum Process. In 2023, asylum-related cases accounted for 8% of approaches to the Council’s Homelessness and Housing service, up from 2% in 2022. Of these, 58% required the Council to prevent or relieve homelessness, highlighting the pressure on resources.

The lack of a coordinated exit strategy and move-on support challenges integration. Refugees face barriers such as limited finances, bureaucratic delays, and poor guidance on housing and employment. With limited engagement from Home Office contractors, local authorities bear the responsibility.

Transition support for refugees remains difficult due to high discontinuation rates and a lack of affordable housing, increasing the risk of homelessness. While a 56-day notice period is a positive development, gaps in funding for integration services continue to burden local authorities and the voluntary sector.

Jan 2025