A Home Office contractor that was forced to apologise for racist staff and housed migrants in “very poor conditions” was rewarded with a jump in profits from government contracts.

Mitie announced in its half-year financial results yesterday that it had made £50m in profit between March and September, following a significant increase in the cash it receives from the government. Although this represents an overall fall from the £59.2m it made in the same period last year thanks to the expiry of £40m of Covid contracts, the firm’s profit from central government contracts has soared 71% to £25.5m.

The outsourcing company’s ‘Care and Custody’ division, which provides services to the Home Office, reported a £20m jump in revenues during the same period, up 32% compared to the same six months last year.

Mitie also separately signed a new £53m contract with the Home Office to provide security services at hotels housing Afghan refugees from September 2022.

It is one of the firms responsible for staffing the notorious Manston centre for asylum seekers in Kent, which MPs were told was unsafe, understaffed and “wretched” by the government’s immigration watchdog earlier this month.

The new contract was awarded seven months after the company admitted it had failed to “escalate” complaints about staff working for the Home Office exchanging racist messages.

Mitie employees who escort migrants and run detention facilities traded “vile” WhatsApps including jokes about Syrian refugees and racist comments about Chinese people in an unofficial chat group, the Sunday Mirror revealed in February.

In a statement, Mitie told openDemocracy: “Following an investigation, in light of the seriousness of the allegations, we dismissed a number of employees whose behaviour did not align with the values and standards we expect of our colleagues.”

It said it had “a zero tolerance approach to racist, bullying, and discriminatory behaviour” and would “take appropriate action against any colleagues who are shown to have shared such content”.

The Home Office said at the time that its professional standards unit would launch an investigation into the incident. It told openDemocracy that it is now working with Mitie to implement recommendations from its investigation.

The anti-racism campaign group Movement For Justice said that Mitie should have been stripped of its public contracts after the incident.

"Mitie is a partner-in-crime with the deliberate racist cruelty of the Home Office. That's clear from Mitie's role in confining thousands of refugees – men, women and children – in grossly overcrowded, unhealthy conditions at the former Manston airbase, where they are deprived of outside contact and kept for weeks on a site that is officially a 24-hour processing centre,” a spokesperson for the group told openDemocracy.

Mitie’s profits, and its latest government contract, come despite a string of criticisms over the company’s poor running of centres in Kent used to receive migrants who arrive in Kent after crossing the Channel by small boats. 

A report by Her Majesty’s Inspectorate of Prisons in November 2021 found that migrants, including large numbers of unaccompanied children, “experience very poor treatment and conditions” at the Kent Intake Unit in Dover and Frontier House in Folkestone.

Adults and children were being held at two Mitie-run facilities for more than three days despite the centre having no sleeping facilities, showers or access to the open air, inspectors found. The Home Office is understood to be responsible for the building itself.

In one case, an eight-year-old girl with serious health conditions was held at Kent Intake Unit and a separate facility nearby for a total period of 37 hours. Inspectors were told that staff had forgotten that she and her siblings were there.

The report also revealed that a 14-year-old boy with severe mental issues was “excessively restrained” by Mitie staff in June 2021 after he began to self-harm. Footage of the incident, which inspectors described as “disturbing”, showed that one staff member “kicked the boy with some force, before dragging him to the ground with one arm around his neck”.

Mitie referred the incident to the police at the time and one of the three staff members involved no longer works for the company.

Inspectors also raised concerns about a lack of safeguarding at the Mitie-run centres after it found that an adult male ex-prisoner considered to pose a medium risk of harm to the public was held together with unrelated children.

During the same period, revenues from the services it provides to the NHS increased by 15% to £123.8m compared to the previous year, though the report does not specify how much profit was made purely from NHS contracts.

A Home Office spokesperson said:“We expect the very highest standards from all our contractors, who must ensure staff and individuals in their care are treated with dignity and respect.

“All departmental spending is carefully scrutinised to deliver the best value for money for the British taxpayer.”