MPs have sounded the alarm that the “dysfunctional” culture at the Home Office means key controls in its processes are “easily abandoned”, in a scathing report unveiling a series of failures in the acquisition of asylum accommodation.
The Public Accounts Committee’s inquiry into the recent acquisition of HMP Northeye has found the department wasted “unacceptable” levels of public money on the site and questioned how its programme to acquire large sites for asylum accommodation “went drastically wrong”.
Northeye was "one of a series of failed Home Office acquisitions for large asylum accommodation sites, totalling a cost to the public purse of almost a hundred million pounds of taxpayers’ money", PAC chair Sir Geoffrey Clifton-Brown said.
The Home Office bought HMP Northeye – a disused prison in Bexhill-on-Sea in East Sussex – for £15.4m in September 2023. That figure was more than double what its owners had paid for it a year before, and the Home Office is now facing building repair costs of more than £20m.
It follows the £34m spent on the Bibby Stockholm barge, which housed far fewer asylum seekers than expected and is no longer being used; £60m on the RAF Scampton site, which was abandoned before it could open; and £2.9m on a cancelled site in Linton-on-Ouse. This comes on top of around £715m spent on the aborted Rwanda scheme.
PAC's report, published today accuses the department of bypassing established processes in place to protect public money in its haste to be seen to address the problem of insufficient accommodation for asylum seekers.
It says the Home Office rejected offers of expert property advice within government, ignored valid criticisms of contract terms that increased its costs, and failed to act on recommendations from the due-diligence reports it had commissioned. "It asserted that it could manage the risks without understanding the full extent of them," the report says.
And the report warns that the Home Office is bound to repeat the failures of the “poorly managed acquisition” if it does not address its “troubling culture”.
PAC said the department had bought HMP Northeye despite being given “clear warnings” that it required significant remediation work, including risks around asbestos and contaminated ground and that it might not be possible to connect the site to utilities.
And having bought the former prison with the intention of using it to house 1,400 asylum seekers, the Home Office has now decided the building is unsuitable and intends to sell it.
The report raises questions as to why the process was so rushed. The Home Office was aware of the site in May 2022 before exchanging contracts 10 months later, “meaning there was not an unusual rush to purchase it”, it says.
The MPs said that over the course of their inquiry, they had “repeatedly” been told by Home Office officials that the department was “working at pace to reduce its reliance on costly hotel accommodation for asylum seekers”. The report notes that this “does not excuse it from its responsibility to safeguard taxpayers' money”.
The report also questions the Home Office’s assertions that it had taken an innovative approach to acquiring the former prison and other sites – arguing that “buying land and buildings is not inherently innovative”.
Home Office lessons from failed acquisition 'should have been evident'
The MPs also used the report to highlight flaws in the Home Office’s approach to learning from poor decisions. They said the department has “accepted it did not strike the right balance between due diligence and operating at pace” and identified “over 1,000” lessons from its acquisition of large asylum accommodation sites – but questioned whether all of those lessons were worthwhile.
One of the lessons was to work to ensure that such acquisitions are in the “right places”, which the committee said “should have been evident at the time”.
It said this approach raised concerns “as to whether such an unacceptable waste of public money could happen again”, and that they were unsure how the Home Office plans to strengthen processes to avoid similar failings in future acquisitions.
More broadly, PAC said the Home Office’s learning from the HMP Northeye acquisition has focused on improving processes, rather than directly addressing a culture in which key controls could go by the wayside.
The committee has urged the department to use its upcoming response to the report to explain how it plans to “raise the profile of control and assurance across the department”, and what changes it has made to ensure future investment decisions are based on comprehensive information and consultation, even when they need to be made quickly.
The report also calls on the Home Office to provide a detailed breakdown on all the costs associated with cancelled asylum accommodation projects; as well as the number of dedicated commercial and property staff it has working in its asylum accommodation team, and its plans to strengthen its commercial capability.
And it asks the Home Office to write to PAC setting out how it intends to reduce spending on asylum support, including by tackling the long-running application backlog; when it expects to stop using hotels to accommodate asylum seekers; and when it expects the Border Security Command to reduce arrivals from small boats.
PAC chair Sir Geoffrey Clifton-Brown said the taxpayer had paid a "steep price" for the lessons the Home Office had learned from the "disastrously managed acquisition".
He said it was "deeply frustrating" that the Home Office was offered advice from expert property teams from other parts of government but chose not to use it.
"When officials are working under pressure, the public must still have confidence that appropriate controls are being followed in government to secure the best outcomes for the people it is trying to help," he said.
"The Northeye site should serve as an example to all departments that ignoring warnings and abandoning controls for a quick outcome is fraught with risk. We hope the recommendations in our report help government to avoid cases like this in the future.”
A Home Office spokesperson said: “The contents of this report relate to the previous government’s purchase of the Northeye site for asylum accommodation, but we have decided against progressing the site to ensure value for money for the taxpayer.”