Public Accounts Committee says new asylum accommodation contracts were poorly planned and badly managed

Parliament's Public Accounts Committee (PAC) has published a report examining the provision of asylum accommodation in the UK.

You can read the report here.

The Home Office has six regional contracts (known collectively as COMPASS) with three prime contractors (G4S, Serco and Clearel, each of which has two contracts) to provide accommodation for destitute asylum seekers awaiting the outcome of their application.

This new model was introduced in March 2012 and replaced 22 separate contracts with 13 different suppliers from across the private and voluntary sectors and local authorities.

PAC says in its report that the decision to rely on fewer, larger contractors was risky and has so far led to delays in providing suitable accommodation. In addition, PAC says the transition to the new contracts was poorly managed by the Home Office and contractors did not inspect the properties they inherited.

PAC also found that the quality of the accommodation provided by the COMPASS contracts is still not up to standard, and the system for asylum seekers to register their complaints is not working effectively.

Margaret Hodge MP, Chair of the Committee of Public Accounts, said: "The Home Office decided to replace 22 separate contracts to provide accommodation for destitute asylum seekers with six regional contracts in order to save £140 million over 7 years. The change was poorly planned and badly managed and is unlikely to yield the savings intended."

"Three contractors secured the new big contracts. Two, G4S and Serco, had no previous experience of accommodating asylum seekers. 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."

"G4S and Serco failed to inspect and check the properties before taking them over. This lack of information contributed to delays, extra cost, and disruption and confusion for a very vulnerable group of service users."

"The Home Office's decision to rely on fewer and larger contractors was risky and lies at odds with the Government's stated commitment to encourage SMEs to deliver public services. The knowledge of experienced specialist providers has been lost and there are fewer alternative options available to the Department if the contractor fails."

"The standard of the accommodation provided has often been unacceptably poor for a very fragile group of individuals and families. The companies failed to improve quality in a timely manner. None of this was helped by the Department's failure to impose penalties on contractors in the transition period. It is disturbing that over a year into the contract the accommodation is still not of the required standard and the Department has only chalked up £8 million in savings."

"Progress was also hampered by the failure of the Home Office and its contractors to establish a proper working partnership and to share necessary information, such as forecasts of demand for asylum accommodation."

"Looking beyond the COMPASS contracts, the Home Office must insist adequate plans are in place for how it will manage the introduction of any new contracts in the future, including an understanding of what will be inherited from previous contractors, and clear arrangements for exiting previous arrangements."

A Home Office spokesman told BBC News that while it accepted there were "challenges" with contracts, it was "disappointed" by PAC's findings.

The Home Office spokesman added that, in contrast, a report in January by the National Audit Office (NAO) "found that the transition to our new providers was well-managed and noted that operational performance is improving".

"The UK has a proud history of granting asylum to those who need it and providing accommodation while applications are considered," the spokesman said.