Serco ‘happy’ to lose £145m on Government contract to house asylum seekers, claims CEO

Rupert Soames was responding to accusations of providing housing that was not fit for habitation

Tom Peck
Tuesday 13 September 2016 20:04 BST
Serco CEO Rupert Soames said his company ‘feel very passionately about looking after asylum seekers well’
Serco CEO Rupert Soames said his company ‘feel very passionately about looking after asylum seekers well’ (Getty Images)

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Outsourcing giant Serco are “happy” to lose £145m on its contract to provide housing for asylum seekers, rather than risk jeopardising their other contracts with the Government, its CEO said.

Rupert Soames, grandson of Sir Winston Churchill and brother of MP Sir Nicholas Soames, faced questions from MPs over accusations of providing housing to asylum seekers in the UK that was not fit for habitation.

But Mr Soames said his company was losing more than £100 on every asylum seeker for whom they provided housing, a number running into the tens of thousands.

“We procure asylum seekers for £350 a month, and we provide for them for £450 a month,” Mr Soames said.

“Our starting point is not the cost. It is whether it meets Home Office standards. Within those standards we seek to get the best value we can.

“We’re not going to make money on this contract. It’s going to lose £145m over its life and we will pay that. We feel very passionately about looking after asylum seekers well.”

Mr Soames, who was wearing a Serco embossed shirt for the occasion, said his company had underbid on the contract in the first place, which was then increased in scale as the number of asylum seekers coming into the UK had risen so rapidy, including “41 per cent” last year.

“One of the things that is galling [about this criticism], is that we have said will spend the money, we are looking after over stayers about our own expense, looking after people where Home Office funding has been cut off. We have been looking after a double amputee in Scotland for two years. It’s quite galling to be implied that we’re rapacious, money grabbing, the standard is horrific, slum accommodation, and so on. This contract at an operational level is working very well.”

Mr Soames was brought in to the company last year, after a series of scandals, notably the claim that it had overcharged the government for the electronic tagging of prisoners, knocked it out of the FTSE 100 and cost its previous chief executive his job.

It also emerged that staff at a prison it operated in New Zealand were running ‘fight clubs.’ Losses have stabilised since Mr Somes’s appointment, and it has since signed contracts to run the Caledonian Sleeper train service from London to the Highlands.

In 2014 it emerged that asylum seekers were being housed in Glasgow in what were described as slum conditions. It was estimated by a second housing provider, Compass, that there are only forty areas in the UK where accommodation can be found that is cheap enough to house asylum seekers within the budgets set by the home office.

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