Public to foot bill for £100m Yarl's Wood fire

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Council-tax payers face having to foot the bill for the fire that caused £100m of damage and virtually destroyed Yarl's Wood detention centre.

Increases of more than £50 a month will be needed to cover insurance claims for damage caused by the fire in February. Bedfordshire Police Authority says homeowners in the county will have to pay out if these claims by Group 4, which runs Yarl's Wood, and its insurers are successful.

This will mean an increase of more than £500 a year for Bedfordshire residents in the average council-tax band who already pay more than £1,000 a year. "The fat cats in the City are taking the premiums and not paying up on the risk," said Adrian Heffernan, the authority's chairman.

The Lloyd's syndicate that insured Yarl's Wood announced in February that it wanted £38m from police for "riot" damage. This claim was disputed by the BPA which does not accept that the disturbance was a riot.

Last week, this figure rose to £97m after the insurers revised their initial estimate.

Lloyd's also announced that it was withdrawing its existing contract on the property because of the security risk.

It has now emerged that insurance cover on two other detention centres run by Group 4 has also been slashed because of similar risks. The policy for Harmondsworth, where there was a break-out in February, and Campsfield has been cut to a ceiling of £10m. This refusal by insurers to take on the risk presented by detention centres has deeply embarrassed the Home Office. It has already had to step in to renegotiate the insurance on Yarl's Wood and has spent nearly £2m on a forensic search of the site, after Lloyd's refused to provide money for police to continue their investigations which include searching for bodies in the burnt-out buildings.

Ministers are expected to insert a special clause into the Police Reform Bill currently going through Parliament, to negate future claims for riot damage by insurers.

The Lloyd's syndicate that acts for Group 4 said its claims were justified because it was "rushed" into assessing the risk posed by Yarl's Wood.

"From our viewpoint, this has called into question the practice of having a mixture of people who are awaiting the results of their appeal and those who have had their application turned down," said David Pye, who runs the syndicate.

There are also fresh concerns about the deportation of refugees who are potential witnesses. Immigration officials were prevented from deporting one man yesterday after campaigners secured a temporary court order. His solicitor said his client, a Turk of Kurdish ethnic origin, had alerted a member of the security staff about the fire and would be lodging a compensation claim against the Home Office for personal trauma.

Firefighters have said much of the damage caused in the fire and riot on 14 February could have been avoided if water sprinklers had been fitted in the building.