Serco fined almost £3m by Home Office for asylum housing failures

Serco has been fined millions of pounds by the Home Office for failing to meet the terms of its contract to provide accommodation for asylum seekers in Scotland and Northern Ireland.

Now a leading MP is calling for the National Audit Office to launch an inquiry into “serious questions” about transparency.

The new figures, which come from a freedom of information (FoI) request, show the multinational contractor failed to meet “key performance indicators” (KPIs) and incurred “service credits” of almost £3 million between 2013-18.

Contract breaches included failing to carry out essential repairs or improvements needed to meet agreed standards on schedule.

The Home Office claims the “financial deductions” are not fines. It also repeatedly refused the request for data made by the Scottish Refugee Council (SRC), only releasing it a whole year later when compelled to do so by the Information Commissioner’s Office.

SRC claims that the statistics highlight not only the long-standing problems with housing reported by asylum seekers, but the Home Office’s knowledge of the issues – and failure to act.

It called the situation a “scandal” and said transparency was critical when Mears Group takes over the asylum accommodation contract – formally known as COMPASS – in September.

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Serco has been beset by complaints from refugees and campaign groups with reports that some accommodation, subcontracted to Orchard & Shipman until late 2016, was dirty, unsafe and substandard.  The company has always maintained that it provides accommodation that meets approved standards at the point of procurement.

Yet the FoI figures for 2016-17 showed the Home Office withheld just over £1 million from Serco’s invoice, in what it described as a “saving for the asylum support budget”.

The following year deductions were still £200,000, and in the first nine months of 2018, had incurred charges of £164,000. Details of earlier years given in a parliamentary answer reveal the charges had been applied since 2013.

SNP immigration spokesman Stuart McDonald MP said the asylum COMPASS accommodation contracts had proven to be “a woeful failure”.

“These disclosures about money being held back from contractors not only confirm that – but also raise all sorts of concerns about transparency, accountability, and the tendering process for the new contracts,” he said.

“I very much hope that the National Audit Office will look at this issue as there are serious questions about whether this system of service credits really incentivises improved performance.

Sabir Zazai, chief executive of SRC, said: “Every day for the past seven years, men, women and families in outsourced asylum accommodation have come into SRC desperate for help with their housing.

“Time and again we were told by the Home Office, Serco and Orchard and Shipman that there was no major or systemic problems. We were basically told there was nothing to see here.

“These fines, which must now routinely be public, show that the people, the refugee rights sector and the parliamentarians were right all along about what was happening in Glasgow. Crucially as this data shows, the Home Office and Serco knew too.”

Zazai claimed the “real scandal” was that the money, held back from the Home Office and budgeted for asylum housing had not gone to “help refugees in the housing, or to the city council, health and refugee services and communities that step into the breach”.

In a report investigating the Home Office’s management of asylum accommodation report from February to June last year, the independent chief inspector of border and immigration found examples of visible defects, poor quality furnishings and dirty flats across the UK’s dispersal areas, including Glasgow.

The report stated that there were 454 complaints recorded against Serco in Scotland and Northern Ireland between 1 April 2016 and 31 March 2018.

It recorded just one Home Office “compliance” officer based in Scotland, noting that 1,467 inspections were carried out by the UK government department in that period.

Of those 352 were found to be “compliant” with 556 “not correctly equipped”, 205 “not fit for purpose” and 111 “inhabitable”.

One woman, who lived in Serco accommodation from 2013 to 2017 and said she was still too scared to be named, said her experience of being housed by the company was “a nightmare”.

She claimed she was housed with her children in an unsuitable, dirty and bug infested flat. Serco has repeatedly claimed that all of its accommodation meets stipulated standards.

However she said it was help from Women’s Asylum Seeker Housing project and the Scottish Asylum Seekers Residents Association that led to her problems being addressed.

She now has refugee status and is able to live “in peace”. “But we can’t forget that time,” she added. “People have already faced trauma when they arrived in UK. They don’t know their rights.”

Patrick Harvie, Glasgow Green MSP, argued the figures further added to the case for Scotland to take control of its own asylum policies.

He said: “The asylum accommodation contract in Scotland has been a catalogue of failure, with Serco’s obvious incompetence adding insult to the injury caused by the Home Office’s reprehensible hostile environment policy.

“People who come here seeking refuge from war, abuse and torture deserve our complete compassion, but they are met with an inhumane system and a KPI culture in which the bottom line rules. We should demand the right to do things differently in Scotland.”

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Jenni Halliday, COMPASS Serco contract director, said: “Following a very difficult service transition six years ago at the start of the COMPASS contract, and significant operational and delivery challenges through to 2015, Serco has developed a strong reputation for service delivery.

“Following our acquisition of O&S (Glasgow) Ltd in December 2016, service performance improved, with KPI service credit penalties significantly reduced.”

A Home Office spokesperson said: “We demand the highest standards from asylum accommodation providers and monitor them closely to ensure this is maintained.

“Where asylum accommodation falls short of the required standards we will take action against providers, including financial deductions for poor performance.”

He claimed the new contracts include plans for “a proactive property management plan” to ensure accommodation issues are quickly resolved.

A Scottish Government spokesperson said: “We, the local authority and third sector organisations are all picking up the pieces of the UK government’s failed asylum policies.

“It only seems fair that when the Home Office fines a provider for poor performance which impacts on people living in communities across Glasgow, that this money should be reinvested in the affected communities via the local authority.”

Charges levied by the Home Office against Serco (Scotland and Northern Ireland)

Source: Home Office

Home Office freedom of information response in full

A version of this article was published in the Sunday National on 19 May 2019.