A company providing accommodation to asylum seekers has made nearly £187m in profits since being awarded lucrative government contracts, despite allegations of “terrible” conditions at the hotels it uses.

Clearsprings Ready Homes is one of three companies with 10-year Home Office contracts to provide accommodation services for asylum seekers. The overall expected costs of these services have increased more than three-fold since they were signed – from £4.5bn to £15bn.

Under current projections, Clearsprings – which provides accommodation services across the south of England and Wales – will be paid £7bn.

Some asylum seekers in hotels that have seen protests this summer have told the BBC that frustration should instead be directed at those companies – like Clearsprings – profiting from their contracts for looking after migrants. Those Home Office hotel contracts have also come under scrutiny from MPs.

Residents at some Clearsprings sites have told the BBC of poor conditions inside their hotels, and sent us photos and video diaries of the food provided, describing some of it as “inedible”.

Since taking on its contract under the previous government in 2019, Clearsprings Ready Homes has paid almost the same amount it has earned in profits – £183m – in dividends to its parent company.

The BBC has approached the company’s founder Graham King for comment, but he has not responded. Clearsprings Ready Homes has also refused to comment.

Since 2019, Clearsprings and the two other providers that cover the rest of the UK have made a combined profit of £383m from the asylum contracts, according to the National Audit Office.

Clearsprings supports about 30,000 asylum seekers across southern England, London and Wales. It subcontracts to hotels to provide accommodation for about half of those and also, according to the latest official data, uses more hotels than the other contractors.

The significant increase in the expected value of its Home Office contracts is because of a wider use of hotels and more migrants arriving by small boat in recent years, the company said in a written statement to a parliamentary committee earlier this year.

Clearsprings and one other provider have said they will pay back some profits, above margins set out in the Home Office contracts, but the government has not clarified if this has happened.

However, Clearsprings’ profits are not excessive for the size of its contract and the sector it is working in.

Clearsprings is “paying as little as possible to the suppliers and taking as much as they can in profits”, says Maia Kirby from Good Jobs First – one of 60 charities to have written an open letter.

People seeking asylum are housed in “miserable” conditions while “millions in public money… is simply taken in profit by a handful of private companies”, says the letter.

On its website, Clearsprings says it “prides itself on providing value for money, quality and transparency”. But Ms Kirby said it is not good value “and I definitely don’t think it’s transparent”.

There is evidence of poor nutrition, poor hygiene and rationing of period products and toilet paper at Clearsprings’ sites, charities have told us.

Asylum seekers in hotels are provided with three meals a day, but we have heard concerns about the standard of food at Clearsprings’ subcontracted accommodation.

“It’s just terrible,” said an asylum seeker from South America, whom we are calling Andrea. She said she has been living in a hotel for two years with her eight-year-old daughter.

“Some people think we are living in a paradise,” she said. “Try to live as an asylum seeker only for one day – the mattresses are dirty, the toilets, everything is dirty, broken.”

Food that is past its expiry date is sometimes served, she told us, and meals often lack fruit and vegetables, and contain mainly heavy carbohydrates such as bread, chips and rice.

Andrea said she boils eggs in the kettle in her room, because it is the only way to get some protein for her daughter. She said she also uses a food bank as it is difficult to buy additional food while living on the £9.95 a week she receives from the government.

At Hackney Foodbank in east London, staff member Farhan Jaisin said he was cautious of giving out donations when asylum seekers started turning up – because they were supposed to be catered for. But when he went inside their hotels, he says, he found “really bad” food and conditions – with toilet rolls, sanitary products and some food allegedly rationed.

“One toilet roll between four people a week… how is that possible?” he said.

Other charities have also told us they have had to feed hungry children from asylum hotels, and say they have seen women who claimed they had been given only seven sanitary towels per period.

Children in asylum hotels are being “forgotten”, according to Prof Monica Lakhanpaul, a paediatrician and professor of child health at University College London.

For the past 18 months, she has focused on women and children living in asylum accommodation in the capital and said: “If a parent fed their child this way, it would be called neglect – yet this is happening in institutions.”

Pictures of basic meals and dirty mattresses have been sent to the BBC by charities and asylum seekers at Clearsprings sites with claims residents had been served uncooked chicken and food which was still frozen.

Hotels were used to house asylum seekers under the previous Conservative government after running out of other accommodation.

The number of hotels being used for this purpose has fallen in recent months, to 210, but at the peak in 2023, 400 were in use. The Home Office says it has reduced the cost of hotels from £9m per day to £5.5m per day.

Another asylum seeker in Clearsprings accommodation, whom we are calling Arturo, says he understands British people are frustrated with the money being spent – but that it is the hotel owners and private companies who are benefiting.

He said he has been in the UK for five years seeking asylum, having fled gang violence in South America.

“If you give me a job, I pay tax, I leave the accommodation. I don’t need your support because I can work,” he told us.

Asylum seekers generally cannot work in the UK, but can apply for permission to if a decision on their asylum claim takes more than 12 months.

Clearsprings’ founder, Graham King, is now a billionaire and was the 154th wealthiest person in the UK, according to the latest Sunday Times Rich List.

He is the person with significant control of both Clearsprings Ready Homes, and its parent company Clearsprings Management, of which he is the sole shareholder, to which nearly £183m in dividends has been paid since 2020.

Clearsprings told MPs it would invest some of these profits back into projects such as social housing.

Responding to questions from the Home Affairs Select Committee in May, Clearsprings said “temporary emergency accommodation [often hotels] is more profitable than longer-term” housing.

It admitted that living in hotels was “really bad for people” and it was pushing to get people into more long-term options.

The committee has been examining the delivery of accommodation from all three providers, including how the contracts work.

The profits made by Mr King’s company are “obscene”, Liberal Democrat MP Paul Kohler, who sits on the committee, told the BBC.

The way the contracts were written meant providers were incentivised to put asylum seekers in hotels rather than bedsits as they could earn “eight times as much profit” due to the higher costs, Kohler said.

It was a “failure at all levels of government” that “private enterprise has simply been allowed to run roughshod” with contracts that simply benefited them, he added.

There is no suggestion the terms of the Home Office contracts have been breached in any way.

Wimbledon MP Kohler, who compared the situation to the PPE scandal during the Covid pandemic, said he was not against private companies operating in the sector, but that the government needed to get out of the current contracts.

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.