The Home Office will sell or transfer a former prison site that it bought as accommodation for asylum seekers but never used.
The department’s 2023 acquisition of the Northeye site in Bexhill-on-Sea cost it £15.4m but was later deemed unfit for use due to contamination.
Speaking at the Public Accounts Committee on Monday, Home Office permanent secretary Matthew Rycroft confirmed said: “Ministers decided only last week that we no longer needed it in the Home Office, either for detained or non-detained accommodation. We did look at both of those options since the acquisition last year. But we have now concluded our assessment that it is not what we need for either of those programmes.”
Rycroft said the Home Office will now be speaking with colleagues across the property function to see if it would be suitable for any other part of government and, if not, will the department will put it on the open market.
Asked if the decision to buy the site was rushed, the perm sec said the department had had to “think laterally and act quickly” as ministers were, "as is quite within their right", pushing officials to progress quickly with the acquisition of the Northeye site and others purchased as asylum accommodation such as the Bibby Stockholm Barge and RAF Scampton, which have also been abandoned.
Rycroft added that it is “difficult when you are operating in a climate where people think you’re not going to act fast enough so I think it was only out of good faith and seeking to do a good job in difficult circumstances that civil servants rushed into action”.
But he said, “with the benefit of hindsight” the department “should have done more on the assurance side, and if that had cost us a bit of pace then that would have been the better thing to do”. He said the Home Office has learnt that lesson and “will be taking longer to acquire future sites because we will be doing more of the due diligence before completing a sale”.
Rycroft added that the department had learnt "more than one thousand lessons" from recent property acquisitions, including the need for greater property expertise, which he said the Home Office has now built up.
He said the Northeye, Scampton and Bibby Stockholm decisions were "all happening at the same time and we've learnt from all of them", and that the department has conducted a lessons learned review which discovered "more than one thousand lessons".
The Home Office's rushed purchase of a former prison site in East Sussex for use as asylum seeker housing saw it cut corners and end up paying through the nose for facilities that will not be used for their intended purpose, the National Audit Office has said.
A National Audit Office report published last month found that the Home Office failed to carry out a full investigation of the level of contamination and the feasibility of fixing it before entering into a contract to purchase the former HMP Northeye site. It said the department lacked in-house expertise to "quality assure" the deal and paid more for the site than it needed to.
According to the watchdog, the Home Office paid £15.4m for the Northeye site, expecting it to be able to house around 1,400 asylum seekers in "non-detained" accommodation. The deal came just a few months after the site changed hands for £6.3m when Brockwell Group Bexhill LLP bought it from the United Arab Emirates, which used it as a military training centre after the prison closed. A technical due diligence report suggested repairs to the buildings could cost more than £20m, but the warning did not feature in the accounting officer advice for the project.
Before the Northeye purchase was completed, the Home Office decided that the site was "unsuitable" for its non-detained asylum accommodation programme and moved it to a programme for detained accommodation, but has now decided the site will not be used for that programme either.