Insurers refuse to cover detention centre after riot

The Yarl's Wood refugee detention centre near Bedford has been closed temporarily, leaving the Government'sasylum policy in tatters and raising doubts about the future of such centres.

Loss adjusters have refused to renew insurance cover for Yarl's Wood, where last month's fire caused £38m of damage to a section of the complex.

It is understood Lloyd's, which underwrites the policy, has serious concerns about security at Yarl's Wood. It also objects to immigration officials herding "desperate" refugees ready for deportation together with others whose claims are unprocessed.

A source at the Group 4 security company, which runs Yarl's Wood for the Home Office, said the decision could have an impact on the insurance contracts for six other detention centres when they come to be renewed.

"As far as the insurers are concerned, the risk has gone up ­ some people in these centres are more desperate and determined than they envisioned," the source said.

The other refugee centres include Tinsley House, at Gatwick, where 12 detainees went on hunger strike two years ago, and Dungavel in Lanarkshire, Scotland, where a man waiting to be deported had tried to kill himself.

Home Office ministers are trying to negotiate new insurance cover that could involve them paying out millions of pounds to secure a deal. Underwriters at Lloyd's are already suing Bedfordshire police for £43m in damages caused by the riot and fire at Yarl's Wood. Under the 1886 Riot Damages Act, the force is liable if it can be proved that rioters started the fire.

Separate inquiries into the events surrounding the fire have been launched by the police, the fire service, the immigration service and Bedfordshire council. The lack of water sprinklers at the centre has already been roundly criticised.

On Saturday, the last 80 detainees at Yarl's Wood had to be moved to undisclosed locations less than 48 hours before the policy expired. As the detainees were driven away in vans, several hundred campaigners staged a protest outside the centre to demand freedom for detained asylum-seekers who have not been accused of any crime.

Yarl's Wood, which had places for about 900 detainees, was part of a plan to increase the rate of deportations and remove asylum-seekers from normal prisons.

Emma Ginn, of the Campaign to Stop Arbitrary Detentions at Yarl's Wood, said: "There is no option for the Government to step in. They are going to have to rethink their treatment of asylum-seekers ­ it's inhuman."

Keith Best, head of the Immigration Advisory Service, said the Yarl's Wood decision had "huge" implications.

"This puts a spanner in the works of the whole question of detention centres ­ it's ludicrous for the Government to house so many people in one place," he added.

The Home Office said the closure was a "temporary" measure, but refused to discuss terms of insurance policies for any of its detention centres.