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 new report on the Home Office's 2023 acquisition of the Northeye site in Bexhill-on-Sea – formerly the HMP Northeye – says the department lacked in-house expertise to "quality assure" the deal and paid more for the site than it needed to.
Today's damning report comes after Home Office permanent secretary Sir Matthew Rycroft admitted earlier this year that the department's rapid procurement of two former Ministry of Defence sites to house asylum seekers had "woefully" underestimated the cost.
According to the NAO, 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.
The NAO noted that Brockwell Group had originally asked the Home Office for £19.6m for the site as an "opening offer".
Preliminary surveys of the site warned of potentially high remediation costs, mainly because of the risk of asbestos in existing buildings and contaminated ground. The NAO said that a full investigation of the level of contamination and the feasibility of fixing it had not been completed before the Home Office entered into a contract to purchase the site.
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.
The NAO said the Home Office rejected offers of expert advice on the purchase of the Northeye site from the Ministry of Justice's property team, made as part of a shared-services agreement between the departments. The watchdog said the Home Office had regarded its "pathfinder asylum sites" programme as outside the remit of the agreement.
Instead the NAO said the Home Office had relied on contracted staff to advise on the deal without putting in place "sufficient oversight".
Before the Northeye purchase was even 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, the watchdog said. Its future is still uncertain.
The NAO said the Home Office's decision to move at pace with the acquisition of Northeye had coincided with a drive on the part of the Sunak administration to reduce the cost of asylum accommodation that began in November 2022.
"The Home Office’s attempt to acquire the Northeye site within just a few months of adopting it onto the non-detained asylum accommodation programme led it to cut corners and make a series of poor decisions," the NAO concluded. "This resulted in it purchasing a site that was unsuitable for that original purpose, and paying more for it than it needed to.
"While the site has been moved to a different programme and may yet fulfil a need the Home Office has, it remains to be seen whether the acquisition of the Northeye site results in benefits that justify its cost."
"Rushed and misjudged decision-making"
Public Accounts Committee chair Sir Geoffrey Clifton-Brown said the Home Office had "once again" overpaid for an asylum accommodation site because of "rushed and misjudged decision-making".
"I am concerned that the Home Office deviated from standard practice, overlooked warnings about the condition of the site and lacked expertise to properly oversee the purchase of Northeye," he said.
"The Public Accounts Committee has previously warned about the risks to taxpayer money when departments forego due diligence in making decisions at pace. My committee will be following up on this issue."
Northeye was one of four "pathfinder sites" identified by the last government with the aim of reducing reliance on expensive hotel accommodation for asylum seekers. The others were the former MoD bases at RAF Wethersfield in Essex and the now-scrapped RAF Scampton in Lincolnshire – both the subject of a damning NAO report earlier this year – and the controversial Bibby Stockholm accommodation barge, which is due to be decommissioned.
The pathfinder sites were part of plans overseen by a so-called "small ministerial group" set up to help tackle illegal migration in late 2022. It included ministers and officials from across Whitehall and was chaired by the then chancellor of the Duchy of Lancaster, Oliver Dowden. Robert Jenrick – then immigration minister, more recently a Conservative Party leadership contender – was also part of the group.
The group was supported by officials in the Home Office, who led on most aspects of the process to acquire the sites, according to the NAO.
The Home Office had not responded to Civil Service World's request for a response at the time of publication.