MPs have backed a motion calling on the Dutch government to stop using private companies to run emergency accommodation for asylum seekers, amid concern about rising costs, fraud and exploitation of labour.

Socialist Party (SP) leader Jimmy Dijk tabled the motion which said asylum accommodation had become a “business model” that allowed commercial operators to rake in millions from the taxpayer.

The refugee accommodation agency COA said emergency accommodation, such as hotels, sports halls and ships, cost twice as much per refugee as permanent lodgings.

The total accommodation budget swelled from €725 million in 2021 to €2.7 billion in 2023. The COA has had to find more temporary facilities since a court ordered it to stop exceeding the daily limit of refugees living in the main reception centre in Ter Apel.

Several examples of rogue operators have come to light in recent years. The financial investigation service FIOD launched an investigation into allegations that LCHD, an accommodation broker based in Didam, Gelderland, had earned tens of millions of euros by overcharging the COA for hotel rooms that it booked for refugees. The COA said this week that it was no longer using LCHD’s services.

Arnhem city council is investigating the activities of Cruisinc, a company that operates several former cruise ships and ferries used to house refugees.

Spreading law

The COA has warned that the problem will become worse if the new right-wing government presses ahead with plans to abolish the legal requirement for municipalities to house a minimum quota of refugees.

The so-called “spreading law” designed to relieve the pressure on Ter Apel and ensure municipalities share the responsibility for accommodating asylum seekers equally.

The new coalition has pledged to repeal it because parties such as Geert Wilders’s PVV say it infringes on the right of local government to act autonomously.