Some outsourcing service providers contracted by the UK government to run British immigration detention centres are threatening to pull out of these deals if the government doesn’t try to rebalance incentives, the FT has reported.

Seven of Britain’s 11 immigration centres are run by private firms Serco, G4S, Mitie and Geo Group, while the Home Office is responsible for maintaining the other four.

However, over past years the profit margins involved in running these centres has fallen significantly. In November 2014 Mitie secured an immigration centre contract with the government worth just £180 million, 30 per cent less than similar contracts signed previously with Serco and Geo Group.

With potential profits falling to this extent, some of the companies involved are questioning whether the lower revenues are worth the significant risk of reputational damage that can come from this line of work.

An executive involved with one of these firms told the FT: “These contracts aren’t risk free. Any commercial company will have to look at the reputational risk as well as the financial risk, and if the government isn’t willing to address some of the issues, they will drive companies out of the market”.

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