Background to the report
The Home Office provides accommodation and support for asylum seekers and their families while their cases are processed, under the UK government’s international obligation to support asylum seekers who would otherwise be destitute. The number of accommodated asylum seekers has more than doubled since 2012, to around 48,000 in March 2020, but has been relatively stable since the beginning of 2019.
From 2012 to September 2019 the Department provided these services through six regional contracts, known as COMPASS. In 2019 the Department replaced COMPASS with seven similar regional contracts for accommodation and transport (the accommodation contracts), plus a national contract for a new helpline and support service (AIRE – Advice, Issue Reporting and Eligibility). The Department awarded the accommodation contracts to three providers – Clearsprings Ready Homes, Mears Group and Serco – who each took on two or three UK regions. Migrant Help won the AIRE contract. Following a transition period from COMPASS, the new contracts became fully operational from September 2019, as the Department had planned. The new contracts have a total estimated value of £4.0 billion over 10 years, from 2019 to 2029.
Content and scope of the report
This report assesses the Department’s early progress towards achieving value for money from the new contracts, measured against its key objectives and taking into account lessons learned from the COMPASS contracts. We assess whether the Department:
- ran a competitive contracting process with a fair balance of risk and reward for providers, leading to sustainable services at a reasonable price (Part Two);
- is providing appropriate housing and support for all accommodated asylum seekers including vulnerable people, with robust contract management (Part Three); and
- has set up a flexible service which can be varied according to demand (Part Four).
It is too early in the life of these contracts for us to reach a definitive value for money assessment of the Department’s current asylum accommodation and support service. We can, however, judge the actions taken to date, as well as the foundations laid for the future of the service. The Department aimed to deliver an improved service that would be sustainable at a reasonable price, meet people’s needs and can be flexed to respond to changing demand.
Against these objectives, the Department is paying more to providers after finding that COMPASS was under-priced and negotiating improvements to the service. Accommodation providers are now beginning to meet service standards, but the AIRE service failed to meet asylum seekers’ needs in its initial months and, despite some improvements, has not yet delivered consistently acceptable performance. Also, the Department faces challenges in adapting services to changing demand and in delivering its plan to redistribute people across the country. To date, the Department has shown that it has learned from the COMPASS contract and has laid the foundations for a better service. The Department now needs to address the challenges we identify, to deliver value for money over the life of these contracts.