One of the UK government’s biggest private sector contractors has denied being hostile to Reform UK after the party’s home affairs spokesperson Zia Yusuf after accused it taking “political positions” against his immigration policy.

Citing a report in the Telegraph that suggested FTSE 250 firm Serco would refuse to support Reform’s deportation plans if it entered government, Yusuf suggested the company “believes itself to be an alternative power base to the duly elected government of the United Kingdom, and is willing to act contrary to the interests of the British electorate”.

“If this were true, I am sure you appreciate a Reform government would be left with no choice but to view Serco as a threat to national security,” Zusuf wrote in a letter sent to the firm and published on social media.

“We will not accept Serco or its representatives taking political positions as it suits you,” he said, adding that a Reform government would “initiate an accelerated review” of government contracts and exercise break clauses with Serco “where possible”.

But Serco denied that it had taken any policy positions or taken issue with Reform’s immigration agenda. The firm added that “inaccuracies” in the Telegraph report were changed “following our representation”.

In a statement shared with City AM, the company said: “As a matter of longstanding company policy, Serco does not take political positions, nor do we comment on the policy programmes of political parties.

 “Policy decisions are matters for whatever party is in government. Serco’s responsibility is to deliver services as specified by the contracting authority as we have for the past 60 years. 

“We operate across many parts of the immigration system, including detention and preparation for removals. We would expect to offer and perform such services in the future.”

Serco operated over 100 asylum hotels

Serco, which pockets more than £1bn annually from UK government contracts, is one of the main operators of asylum hotels and wider accommodation. The other two firms involved in accommodation are London-listed Mears Group and Clearsprings Ready Homes, which is headed by the “asylum king” billionaire Graham King. 

Contracts for asylum hotels have cost the government £15.3bn in the 10 years to 2025, according to an audit report. 

Asylum contractors have already come under pressure over profits gained from the agreements, with providers promising to pay back gains when they exceed five per cent. 

Yusuf’s letter and recent media reports on outsourcing are likely to add to scrutiny on procurement firms. 

The current asylum contract will run to 2029, with officials hoping to move asylum seekers from hotels into army barracks and House in Multiple Occupations (HMOs). 

City AM revealed earlier this year that a crucial bidding deadline for a new contract had been pushed back, hinting at the underlying pressures facing the government and procurement affirms. 

At the end of March 2026, there were 97,519 people in receipt of asylum support, with around 20,885 staying in asylum hotels.

In an interview with City AM last year, Serco chief executive Anthony Kirby said the firm was operating around 120 asylum hotels but had since reduced the number by half to align with government policy.

“Unfortunately, we don’t forecast demand, that’s the responsibility of the Home Office, but we stand ready to provide safe and secure accommodation to meet the Home Office’s demand,” Kirby said.

Addressing reports of violent protests outside some asylum hotels, Kirby said: “Clearly, the additional cost that it takes to police those protests is something for the Home Office rather than us. 

“We do have security in those hotels but we’re not responsible for the security of the perimeter or the outside of those hotels, that’s the Home Office.”