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Asylum seeker housing contracts “poorly planned and badly managed” (24 April 2014)

Date: 24/04/2014
Duncan Lewis, Immigration Solicitors, Asylum seeker housing contracts “poorly planned and badly managed”

The Public Accounts Select Committee has criticised the management of contracts to provide housing for asylum seekers, saying the overhaul of contracts was “poorly planned and badly managed”.

The Home Office overhaul of asylum seeker housing contracts involved switching from 22 contracts with 13 individual suppliers to just six contracts with three suppliers under COMPASS contracts. Out of the three suppliers – Clearel, Serco and G4S – only Clearel was an existing supplier of asylum seeker housing and neither Serco nor G4S had experience as providers of asylum seeker housing.

The committee’s report found that the switch in providers for asylum seeker housing was poorly managed and in some cases, properties taken over by the new providers were not inspected before tenants moved in.

The committee said that the decision to rely on fewer providers had been “risky” and that the Home Office had failed to “facilitate an exchange of information between outgoing providers and the new contractors”.

The move to fewer housing providers in 2012 was intended to save £140 million over seven years, but in the first year of the new contracts just £8m was saved. The total spend for asylum seeker housing over the seven-year period was £700m. However, the committee found that some of the accommodation provided to asylum seekers was not up to standard – but the Home Office did not instigate penalties for the three contractors for poor performance until last July.

The report said that “poor data” had also contributed to flaws in key assumptions in some of the contractors’ bids – and extra costs had been accrued during the transition period when some of the existing contracts had to be extended. The Home Office’s failure to penalise contractors for not getting the contracts “up and running” in time led to a lack of financial incentive for the contractors “to deliver on time”, the report said.

By January 2014, the Home Office found that all three contractors were liable for penalties, with G4S and Serco incurring penalties amount to around £3m for the period January to June 2013 alone.

Housing is provided to around 23,000 asylum seekers annually – in 2011-2102 the cost was estimated at £150m.

Chair of the Public Accounts Committee, Labour MP Margaret Hodge, said the Home Office had been “short-sighted” in deciding to take a “hands off” approach in the management of the transition of contracts.

“Instead of brokering a smooth transition between outgoing and incoming contractors and with Local Authorities, the Home Office short-sightedly decided to take a hands-off approach and only allowed three months to get the new contracts up and running,” she said.

“The knowledge of experienced specialist providers has been lost and there are fewer alternative options available to the department if the contractor fails.

“The change was poorly planned and badly managed and is unlikely to yield the savings intended,” she added.

Duncan Lewis Immigration Solicitors

Duncan Lewis is a leading firm of immigration and asylum solicitors and can advise on access to housing and services for asylum seekers, including Legal Aid, housing benefit and asylum appeals.

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For expert legal advice on immigration and asylum in the UK, contact Duncan Lewis immigration solicitors on 020 7923 4020.


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