G4S and Serco, two of the three companies awarded contracts to house asylum seekers in the UK had no previous experience of managing asylum accommodation, a new report from the Public Accounts Committee (PAC) has revealed.
Only Clearel had previous experience of accommodating asylum seekers.
The report also shows that the transition to six new regional contracts known collectively as COMPASS, to provide accommodation for destitute asylum seekers, and their operation during the first year, did not go well.
“The standard of the accommodation provided was often unacceptably poor and the providers failed to improve quality in a timely manner,” the report shows.
The overall performance of the contractors has been patchy, there were delays at the outset and the Home Office and contractors have all incurred additional costs, the report shows.
The report further shows that the Home Office poorly managed the transition from the old contracts and failed to impose penalties on contractors in the transition period.
Margaret Hodge MP, Chair of the Committee of Public Accounts, said: "The Home Office decided to replace 22 separate contracts to provide accommodation for destitute asylum seekers with six regional contracts in order to save £140 million over 7 years. The change was poorly planned and badly managed and is unlikely to yield the savings intended.”
Ms Hodge added: “Looking beyond the COMPASS contracts, the Home Office must insist adequate plans are in place for how it will manage the introduction of any new contracts in the future, including an understanding of what will be inherited from previous contractors, and clear arrangements for exiting previous arrangements."