State-sponsored Poverty a Cash Cow for Big Business

Private hostel owners rather than asylum seekers have been the real beneficiaries of the direct provision system.

“I have no money to buy toys for my kids, aged two and five years. When we go past an amusement park my kids often ask me why they can’t go in.”

Elie Ciaba says he is at the end of his tether. The 38-year-old asylum seeker from Democratic Republic of Congo lives in a small room at the Ocean View hostel in Tramore, Co Waterford, with his pregnant wife and two children. Like 6,300 other asylum seekers in the direct provision system, the family live in a form of State-sponsored poverty, surviving on welfare payments worth €57 per week. Every six months they can apply for an exceptional needs payment of €150 per person.

“I have no money to buy toys for my kids, aged two and five years. When we go past an amusement park my kids often ask me why they can’t go in. I can’t pay for them. I can’t do anything,” says Mr Ciaba, who, as an asylum seeker, is prohibited from working.

Conditions at their hostel are tough and morale is low among residents.

“There isn’t enough space for my children to play in the room. We aren’t allowed to use the kitchen so my kids never see their mother cook. They don’t even know the name of some kitchen utensils,” he says.

This is how the Ciaba family has lived since they arrived to claim asylum in Ireland three years ago. But at the 49 other asylum seeker hostels around the country, thousands of families face similar challenges living below the poverty line – sometimes for four, five or even six years due to huge delays in processing their claims for protection.

“My three kids were born here and have Irish passports,” says an asylum seeker from Sierre Leone, living in Mosney who attended yesterday’s protest. “It’s very difficult to raise children on this money and we aren’t allowed to work to make any more,” she says.

The weekly direct provision payment of €19.10 and €9.60 for children is the only welfare payment in the Republic that has not risen over the past 10 years. The Government has also actively moved in recent years to block asylum seekers from claiming child benefit – a policy free legal advice centres and various children’s groups condemn.

“The policy of denying child benefit to children of asylum seekers has had a significant and negative impact on these children,” says Jillian van Turnhout, chief executive of the Children’s Rights Alliance. “What most children living in Ireland consider to be normal activities – such as a visit to the cinema, a class trip, or a birthday present to bring to a friend’s party – are not a possibility for children in the direct provision system,” she says.

Living conditions for asylum seekers are set to worsen in coming months due to cost cuts imposed by the Reception and Integration Agency, the unit of the Department of Justice responsible for the care of asylum seekers.

A recent “value for money” review found the Government pays too much to house and feed asylum seekers because it does not run fully open tender competitions to secure contracts with private operators of asylum centres. The review also found the agency maintains too much “excess” bed capacity at accommodation centres nationwide.

The agency’s solution is to close several hostels to reduce capacity, which involves the transfer of several hundred asylum seekers to different hostels where they are likely to have to share bedrooms with people. This is already occurring at Mosney, where 109 people are being forced to move from their own rooms to share bedrooms at the Dublin hostel Hatch Hall. The agency has also recently closed two of the four self-catering centres, where asylum seekers are allowed to cook for themselves.

One of the findings of the “Value for Money” review is that private hostel owners rather than asylum seekers or taxpayers have been the real beneficiaries of the direct provision system since it was set up in 2001.

It found “restricted competition” among commercial operators meant rates are not “robustly tested and the seven State-owned accommodation centres were €6 a person a day cheaper than those owned by private operators. The review expressed concern about contract renewals agreed by the Government, with 16 private operators in 2008 and 2009 that led to price increases of more than 5 per cent at a time of deflation.

NGOs complain a culture of secrecy surrounds the award of these multimillion euro contracts because the Department of Justice refuses to disclose the details due to “commercial sensitivities”. This makes it virtually impossible to properly scrutinise payments worth almost €750 million since 2002.

However, the financial accounts of the four biggest accommodation providers – Mosney, East Coast Catering Ireland Limited, Millstreet Equestrian Services and Bridgestock – demonstrate that housing some of the poorest people in society has proved a very lucrative business for some entrepreneurs.


  • Three meals a day and a bed, typically in a shared room. 
  • Adult welfare payment: €19.10 per week. 
  • Child welfare payment: €9.60 per week. 
  • Exceptional needs payment: €150 every six months (to cover clothing). 
  • Back to school allowance: €200 to €305 depending on age of child 

Asylum seekers who refuse to stay in full-board centres are not entitled to a rent supplement or assistance with other basic expenses. They generally are not eligible for child benefit payments. 


The Government has spent almost €750 million housing asylum seekers through its direct provision system since 2001 with private firms winning most of the contracts. 

The top four money makers: 

Bridgestock Limited is owned by Séamus and Kathleen Gillen from Tullamore, Co Offaly. It runs four centres in Athlone, Ballyhaunis, Sligo and Galway with contracts to house 1,249. The firm had net cash flow of €6.29 million in the year to the end of June 30th, 2008, generating operating profit worth €1.57 million. The company paid €1.12 million in rent to properties owned by the Gillens in 2008. 

Mosney recently had its contract reduced to house 650 people, down from 800. The former Butlins camp owned by Phelim and Elizabeth McCloskey, has seen its fortunes turned around by moving into asylum seeker housing. In the year to end October 2009 it made revenues of €8.8 million and a pretax profit of €122,916. The firm paid donations to Fianna Fáil worth €4,050 in 2009 and €5,500 in 2008. 

East Coast Catering Ireland won the tender to develop the Balseskin reception centre in 2001. It also operates the Hatch Hall hostel in Dublin and a self catering centre in Dundalk and has contracts to house 779 people. The directors are Brian Byrne, Denis Williams, Richard Sheppard and Patrick O’Callaghan. The firm last filed financial accounts to the companies registration office for the year ended February 28th, 2006. These show it made a pretax profit of €1.5 million on revenues of €8 million. 

Millstreet Equestrian Services Ltd is owned by Noel C Duggan. It operates four centres in Cork, Kerry, Carrick-on-Suir and Waterford with contracts to house 656 people. The company booked a profit of €450,721 on revenues of €6.96 million in 2008. No breakdown is given between the value of its asylum services and equestrian activities. 

(source: Irish Times)