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Full report: COMPASS contracts for the provision of accommodation for asylum seekers

G4S and Serco, two of the new providers awarded Home Office contracts to provide accommodation for asylum seekers in the UK, struggled to get contracts up and running owing to negotiating difficulties with existing housing suppliers. This has resulted in poor performance, delays and additional costs for the Home Office, according to a National Audit Office investigation published today.

In 2011-12, the cost to the Home Office of providing accommodation for asylum seekers was £150 million. In March 2012, the Home Office signed six new contracts called COMPASS (Commercial and Operating Managers Procuring Asylum Support) with three providers – G4S, Serco and Clearel – aiming to save around £140 million over seven years. In 2012-13, it achieved a saving of £8 million.

Although overall performances are now improving, two of the providers, G4S and Serco, are still failing to meet some of their key performance targets, notably relating to the standards of property and the time taken to acquire properties for asylum seekers.

In three regions – the North West; Midlands and East of England; and North East, Yorkshire and the Humber – transition to the new contracts took longer than originally planned, up to three months in some cases. Clearel was the only contractor to meet the original September 2012 deadline for completion of transition in both of its regions. G4S and Serco struggled throughout  the transition period to establish a robust and reliable supply chain of housing using existing housing providers and to source new houses. This resulted in delays to transition and continued uncertainty for asylum seekers.

Of the 20,000 asylum seekers housed by the Home Office at the time of transition to the new contracts, around 90 per cent were able to stay in their existing accommodation. Some of those who were asked to move received mixed messages, and communications were not routinely translated, risking gaps in understanding among those affected.

Today’s report also reveals that commercial negotiations are still underway over whether the contracts need to change, what additional costs have been incurred by the Home Office and what rebates to the Home Office from the providers should be applied for poor performance.

The providers believe the information supplied to them by the Home Office during procurement was inadequate in some areas and has resulted in some of the difficulties now faced in running the service. For example, historical information on demand and the service user population does not match the reality the providers are facing, with take-up of asylum accommodation higher than the Home Office predicted.

“The transition to the COMPASS contracts happened during a demanding period for the Home Office. However, many of the problems that arose remain and are continuing to affect the performance of G4S, Serco and Clearel. Until they are resolved, it will be difficult for the Home Office, providers and local authorities to develop the mature relationships needed to achieve the envisaged savings and an effective service.”

Amyas Morse, head of the National Audit Office, 10 January 2014

Notes for Editors

1.    The Home Office provides accommodation and support for individuals and families seeking asylum in the UK who are assessed as being destitute. In 2012-13 the Department provided accommodation for around 20,000 asylum seekers. In March 2012, the Department signed six new contracts for the provision of these services, collectively called COMPASS (Commercial and Operating Managers Procuring Asylum Support). It awarded G4S, Serco and Clearel contracts to supply accommodation services, with each awarded a contract to deliver these services in two of the six regions of the UK. The Department aimed to save around £140 million over seven years through the introduction of the new contractual arrangements. The six regions are:

•    North West
•    Scotland & Northern Ireland
•    North East, Yorkshire & the Humber
•    Wales & South West
•    Midlands & East of England
•    London & South East

2.    Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.

3.    The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 860 staff. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of almost £1.2 billion in 2012.