Asylum housing scheme 'badly managed', say MPs
A "badly managed" Home Office scheme resulted in asylum seekers being placed in "unacceptably poor" housing, the Public Accounts Committee has said.
Three firms - G4S, Serco and Clearel - were awarded contracts in March 2012 to find accommodation for asylum seekers.
But a report by the Commons committee concluded that G4S and Serco had lacked the required experience for the task.
The Home Office said, while it accepted there were "challenges" with contracts, it was "disappointed" by the findings.
"The UK has a proud history of granting asylum to those who need it and providing accommodation while applications are considered," a spokesman added.
The three companies had been brought in to replace 22 separate contracts to provide housing to destitute asylum seekers.
The PAC said the scheme had intended to save £140m over seven years, but only achieved a saving of £8m in its first year.
"The change was poorly planned and badly managed and is unlikely to yield the savings intended," said committee chairwoman Margaret Hodge.
The Home Office spokesman said that £8m had been in saved in the first six months of operation and "further significant savings are predicted" for 2013-14.
The MPs' report said the Home Office did not allow enough time to make the transition between experienced specialist providers and the new firms.
"G4S and Serco had no previous experience of accommodating asylum seekers," said Mrs Hodge.
"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 PAC report revealed that both G4S and Serco took on housing stock without inspecting it, and then found that many of the properties they had taken on did not meet the required quality standards.
"The standard of the accommodation provided has often been unacceptably poor for a very fragile group of individuals and families," Mrs Hodge added.
"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 £8m in savings."
The committee called on the Home Office to learn from its mistakes and not change a contracting model in future without a "clear business case" justifying the decision.
It called on the department to re-examine its savings forecasts to make sure they were realistic and achievable.
The PAC's conclusions follow a report in January by the National Audit Office (NAO), who criticised the length of time taken to house asylum seekers.
Ninety per cent of those requiring accommodation were able to remain in their existing place of residence while the contracts were changed.
But around 2,000 asylum seekers who had to move as a result of the new contracts received "mixed messages", the NAO said, and those messages were "not routinely translated".
The Home Office spokesman said that NAO report had "also found that the transition to our new providers was well-managed and noted that operational performance is improving".