Asylum seeker housing move may cost £200k

Dudley Council could be forced to pay a £200,000 penalty if it stops providing housing for asylum seekers, it was revealed today.

Birmingham and Wolverhampton city councils have already said they will pull out of a contract with the UK Border Agency in June next year — which is when their contracts end.

But Dudley has an agreement with the agency right up until June 2012, so if it pulls out at the same time, it could face being penalised for leaving the contract early.

Birmingham and Wolverhampton councils are not expecting to face penalties.

Dudley is still part of the West Midlands Consortium of councils that together try to find homes for hundreds of asylum seekers.

Sandwell Council left three years ago and Walsall five. Dudley says it is yet to make a decision on whether to extend its contract with the UK Border Agency.

David Simms, cabinet member for housing, libraries and adult learning, said he will not make a decision until it has been clarified what kind of penalty the council would face for quitting. He added: "It could be £200,000. The council is taking legal advice.

He added: "We won't make a decision until we have seen exactly how the system for allocating housing will work now Wolverhampton and Birmingham have dropped out.

"We will not be providing any more housing than we currently do, though. We are not in a position to do that."

He denied the borough would be forced to take on more asylum seekers if it stayed on in the contract.

Dudley Council currently provides 78 homes for asylum seekers.

It has 23 single people and 55 families — including 211 adults and children — on its books. He said: "We are just keeping our options open before we decide what to do."

Birmingham City Council, which provides around 190 homes a year to asylum seekers, said it needs to concentrate on providing homes to local people during "difficult economic times".

Wolverhampton will continue providing 124 homes for asylum seekers until June next year. The council house waiting list in the Dudley borough currently stands at 5,882 people.