PAC: Elements of new asylum services “set up to fail”, with major concerns exposed in Covid response

The Home Office is responsible for the delivery of housing and support services to people seeking asylum in the UK while their cases are being processed. These services are contracted out - in 2016 the PAC Committee raised concerns about the management of COMPASS, the previous contracts, and in late 2019 the Home Office introduced new contracts to provide accommodation and a new helpline and support service, AIRE.

The Department is paying an estimated 28% more to the new providers than for the COMPASS contracts, and in a report today the Public Accounts Committee says it must now prove it is getting value for both the taxpayer and those who rely on its services. Early signs showing there is a long way to go before the Home Office delivers what it has promised on accommodation and essential services for asylum seekers.

The lack of preparation and failure to share data meant elements of the new services were “set up to fail”. The failure to have effective services fully up and running in the first year has had a significant impact on the lives of asylum seekers, hugely exacerbated by the pandemic crisis.

In response to this inquiry, MPs from across the UK have raised concerns with the Committee about the lack of discussion with local authorities as service providers moved asylum seekers who had contracted Covid-19 into new, temporary accommodation. In one instance notified to the inquiry a group of people were moved a hotel in a different local authority area, at the last minute and without notifying either the relevant local authority or the NHS bodies affected. In another instance, the asylum services provider had told the affected local authority, but had not informed the local health commissioner that 160 asylum seekers were moving to a local hotel, who could need medical and other services.

The Committee says the pace at which the Home Office had to work does not excuse the lack of discussion with local authorities and local NHS bodies about how to manage this resettlement. Vulnerable people, including families with children, have been living in accommodation that does not meet their needs, and for far too long – which also masks an underlying problem in ensuring adequate accommodation for people when they first apply.

Thousands of people continue to be placed in hotels rather than more appropriate accommodation. Approximately 9,500 asylum seekers are currently accommodated in 91 hotels across the UK. However, hotel use was high even before the COVID-19 pandemic, with more than 1,000 people in hotels each night since October 2019.

Meg Hillier MP, Chair of the Public Accounts Committee, said: “MPs from across the country responded to this inquiry with examples of lack of consultation and information when large numbers of people were moved into hotels in their area at pace. Quite simply, there was a wholly unacceptable failure of the Home Office to communicate with local authorities and health services as they rapidly shifted hundreds of asylum seekers into hotel accommodation. In some cases who people who had contracted Covid-19 were moved to another borough without the authorities being informed. Even at the pace of events there was no excuse for this lack of communication.

“The Home Office has cranked up the payments for these new contracts - now it must prove it can correspondingly crank up performance and deliver at least decent, suitable accommodation and services to people fleeing war and persecution to seek asylum in this country.”

1 It is unacceptable that the Department has failed to engage adequately with local stakeholders. The Department and its providers have repeatedly failed to properly consult and communicate with local authorities and NHS providers, and local MPs on the use of hotels in their areas. We are concerned to hear that the Department moved service users that had contracted COVID-19 to a hotel in another local authority at the last minute and without notifying either the relevant local authority or the relevant NHS bodies affected. We are similarly concerned to hear that in another local authority, the provider had told the local authority but had not informed the local health commissioner that 160 asylum seekers were moving to a local hotel and would need medical services. Where plans are shared, this is not done so with enough time to allow health and well-being services to put the necessary support services in place. It is essential that the Department contacts local care commissioning groups or equivalent before relocating asylum seekers in their areas so that their medical needs can be properly catered for. The Department accepts it needs to improve how it works with local partners, but despite its claims to have redoubled efforts since we last discussed this issue in June 2020, MPs’ and local authorities’ concerns have continued.

Recommendation: The Department should, as a matter of urgency, communicate with NHS bodies, MPs and other key stakeholders such as police, setting out how it will consult and engage with them in future. The Department should write to the Committee within three months to confirm its approach.

1. We are very concerned that thousands of people continue to be placed in hotels rather than more appropriate accommodation. Due to the COVID-19 pandemic, ministers decided to continue support for asylum seekers after their asylum claim had been resolved. As a result, since March 2020 many more people have entered the asylum support system than have left it. The Department has increasingly used hotels as contingency accommodation for asylum seekers. Approximately 9,500 asylum seekers are currently accommodated in 91 hotels across the UK. However, hotel use was high even before the COVID-19 pandemic, with more than 1,000 people in hotels each night since October 2019. Some asylum seekers have been in hotels for far longer than 35 days, the point at which the Department expects providers to have moved people into more permanent accommodation. Hotels usually lack facilities for children and are not suitable for families to share for extended periods. While in hotels, asylum seekers cannot register with a GP or enrol their children into school, so extended stays are potentially damaging to all asylum seekers and particularly to children. On 1 October 2020, 428 school-age children had been in hotels for more than 35 days. The Department asserts that it prioritises getting families with children, and other vulnerable service users, out of hotels quickly, and is producing further instructions to providers on how to prioritise getting people out of hotels appropriately.

Recommendation: The Department should, within three months, set out a clear plan for how it will quickly and safely reduce the use of hotels and ensure that asylum seekers’ accommodation meets their individual needs.

3 The Department’s failure to prepare effectively for the new service means that it has yet to deliver what was promised. The model of regional accommodation contracts is similar to what existed under COMPASS, although the Department intended the new service to improve asylum seekers’ experience and make it more sustainable. Although the previous COMPASS contract was due to expire in 2017, the Department only started planning for the new contracts in 2016, meaning it did not have enough time to consider all its options before the old contracts expired. The Department extended the COMPASS contracts by two years, to September 2019. The Department’s plan to redistribute asylum seekers more evenly across the UK was similarly agreed too late to be reflected in the new contracts. Demand for the new national helpline AIRE has far exceeded the Department’s expectations. After an initial spike in demand in the first few months of the contract, demand has stabilised at between 35,000 and 40,000 calls per month, twice the Department’s forecast. The Department lacked the data it needed on calls to COMPASS providers, and failed to accurately forecast the level of unmet demand under the COMPASS service. The successful bid for the AIRE contract was costed on the basis of an average call duration of four minutes. The Department had estimated that calls would require between 12 and 17 minutes, but they still awarded the contract on the basis of the bidder’s assumptions. As a result, between September 2019 and January 2020 the AIRE provider answered only one-fifth of the calls it received.

Recommendation: The Department should, within six months, review how long it would need to redesign the service for the next set of contracts and set a timetable to give itself enough time to prepare effectively and consider alternative models.

1. Despite paying more for the new service than for COMPASS, the Department has not yet demonstrated that it is getting value for money in return. The Department asserts that COMPASS was under-priced and that its modelling indicated that the new services should cost between 20% and 31% more. Only three of the seven geographically based contracts initially attracted more than one bid, and three contracts were awarded to the sole bidder. Two of the contracts initially attracted no bids at all. In total only four companies submitted bids and the Department became a customer in a seller’s market. The Department is paying an estimated 28% more to providers, but with more bids it may have been able to secure better prices. Two of the three COMPASS providers continued to provide services under the new contracts, even though one of these had paid millions of pounds in service credits for performance failings. In return for paying more, the Department expects a better quality service and better support for vulnerable people. To be able to provide this better service, providers need to share data with each other, and with the Department. However, this has been hindered by an inability to share information automatically; instead relying on exchanging information by email and telephone, which is inefficient and more prone to errors. The Department is working to improve the automated sharing of data. Providers expect to make profits of between 5% and 13%, which the Department deemed reasonable when compared to other outsourcing contracts. The Department intended, from the early months of the contract, to use open book accounting to assess the providers’ profits, but this is not yet in place, meaning it cannot know whether it is paying a fair price for the services and therefore it cannot provide evidence to show contractors are not making more profit than is reasonable. The Department is overclaiming success and justifying a higher fee on the basis of an improvement in the quality of service which it could not evidence. This is not acceptable.

Recommendation: The Department should, within six months, explain to the Committee how it is strengthening its contract management approach to ensure that it is getting value from the increased costs.

The Department should not claim improvement without evidence and should write to the Committee within six weeks to provide an update on what the data is showing in terms of service improvement. The Department should thereafter provide the Committee with regular updates on this matter.

1. The Department’s lack of transparency on the service’s performance is hindering the kind of engagement with stakeholders that it claims to want. The Department has committed to learning lessons from the Windrush scandal, including listening to the people most affected by the Department’s policies and operations and consulting with a wide range of people and organisations. Yet stakeholders who represent asylum seekers still need more information on the contracts’ performance to help them better support people. For example, stakeholders need greater transparency over service standards and performance management to give them confidence that the Department has effective mechanisms in place to hold suppliers to account for the services they provide. Cabinet Office guidance on public contracts states that departments should publish data on contract performance. A year into these new contracts, the Department has not yet published any performance data, although it plans to publish some performance information from October 2020.

Recommendation: The Department should immediately meet its commitment to communicate with stakeholders by publishing data for all key performance indicators, and should also identify what other information, if published, would provide stakeholders with a full picture of the service.

1. The Department has failed to ensure the safety and security of some of the vulnerable people who use asylum accommodation and support services. We are concerned that the Department focuses on processes, such as awarding contracts on time, at the detriment of the needs and experiences of asylum seekers. While the Department is aware that far-right organisations have been protesting outside some hotels, it does not track these incidents or engage the police on a national level. There have been 29 asylum seekers in hotels with positive tests for COVID-19. There were also 47 people with positive tests in the Stone Road initial accommodation hostel in Birmingham, who were moved to accommodation and hotels in other locations. The Department’s accommodation contract with providers does not have a key performance indicator for safeguarding asylum seekers and the Department still developing a framework for monitoring and assuring itself that providers meet their contractual requirements on safeguarding. The Department has committed to working with its partners, such as local authorities, to ensure they understand this framework.

Recommendation: The Department should, within three months, publish its safeguarding assurance framework, specifying:

- when it will be implemented and how it will operate;

- how it will focus on the experience of service users; and

- how partners will feed in their concerns and experiences./ENDS