Home Office 'bungled G4S and Serco asylum centre contracts'

MPs issue a scathing verdict on the Government's latest botched outsourcing project

DEPUTY BUSINESS EDITOR

The Government has come under harsh attack from the powerful Public Accounts Committee of MPs over yet another botched G4S and Serco outsourcing project: the contracts to run asylum centres.

The Home Office was accused of taking a major risk when it split the housing of Britain's 23,000 destitute asylum-seekers from 13 different specialist suppliers, including local authorities and private and voluntary providers, to just three firms, in order to save £140m. Two of the three, G4S and Serco, had no experience in running such centres.

Previous reports have already condemned the way asylum-seekers are being crammed into overcrowded and substandard accommodation since the changes, but the MPs' report yesterday is the harshest criticism yet of the way the Government handled the outsourcing.

The shift to the new scheme was made in March 2012, but led to severe delays in the provision of the accommodation, which is still not up to standard. That caused "disruption and confusion for a very vulnerable group of service users," according to the report.

Under the terms of the tender, the three operators were supposed to get their residences up and running between March and May of 2012, but none was ready.

The timetable was extended to the September, when the third (and experienced) asylum centre operator, Clearel, got its sites running. But due to their lack of expertise, the report says, G4S and Serco were still not operational until almost three months later – a full 10 months after the transition period began.

Despite these delays, during which the Home Office ran up extra costs by having to extend the previous contracts, the department did not penalise the companies. In fact, it only eventually started to fine them for their poor performance from July 2013. Even then, it only reached an agreement on the penalties owed by G4S and Serco – some £3m – in January of this year.

"Over a year into the contract, contractors have remained slow in providing decent accommodation for a very vulnerable group of people," the report said.

It harshly criticised the Government's failure to design contracts that incentivise suppliers to be ready to start operating on time and penalise those who fail to deliver.

The report also said that the very idea of moving from a diverse group of suppliers to three major operators was flawed. Not only was it in direct contrast to the Government's stated aim of procuring from more small and medium- sized companies, but the Home Office "no longer has the diversity of provision it once had, nor the specialist providers, and has fewer alternative options available if a contractor fails. Any failures by a single contractor would impact on a greater number of asylum-seekers."

G4S and Serco said they were not given accurate information about the sites they were taking on, but the report says they should have carried out their own inspections and checks.

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