The Home Office’s purchase of a derelict prison for £15.4 million before deciding it cannot be used to house asylum seekers has raised concerns over its ability to stop such an “unacceptable waste” of public money from happening again, a new report has warned.
The Public Accounts Committee found the Home Office “rushed” to spend public money to cut costs for supporting asylum seekers, but has “very little to show for its efforts”.
The cross-party committee said the Government body ignored expert advice available at the time during its bid to buy former HMP Northeye in efforts to secure 1,400 bed spaces, and bypassed processes to protect public money.
The Home Office completed the sale in September 2023 under the previous government, paying more than double what had been paid for the site 12 months earlier.
Now the site, in Bexhill-on-Sea, East Sussex, remains in need of significant work – and the Home Office plans to transfer it to another Government department or sell it, the report added.
It also criticised the Home Office’s “dysfunctional culture” where value for money was “a secondary concern”, and branded it “unacceptable” to repeat the warning from its report last year.
The publication from MPs released on Wednesday read: “The Home Office repeatedly emphasised that it was working at pace to reduce its reliance on costly hotel accommodation for asylum seekers, but this does not excuse it from its responsibility to safeguard taxpayers’ money.
“As we have previously found, in some cases these programmes have cost more than the alternative of using hotels.”
The report also cited the Northeye sale was among purchases of large accommodation sites for asylum seekers that has gone “drastically wrong” and come at a high cost to the taxpayer.
Bibby Stockholm was one example detailed after £34 million was spent on the barge which housed fewer migrants than expected before its contract ended in January, while £60 million was spent on a site at RAF Scampton in Lincolnshire, which was scrapped by the new Government in a bid to cut costs before it opened.
Committee chairman, Sir Geoffrey Clifton-Brown, said: “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 £100 million of taxpayers’ money.
“Treasury rules for safeguarding public money are there for a reason and should only be overridden in extreme circumstances. This case clearly demonstrates why those safeguards should normally be followed.”
He added: “The Home Office says it has learned the lessons from its disastrously managed acquisition of the Northeye site. These are lessons for which the taxpayer has paid a steep price.”
The findings come after a Whitehall spending watchdog, the National Audit Office, also said the Home Office’s attempt to acquire the Northeye site in a few months led to cut corners and a “series of poor decisions”.
The latest report on Wednesday said while the Home Office identified “over 1,000” lessons from its acquisitions of large asylum accommodation sites, committee members remain to be convinced it can put learning into practice.
The report added: “Given that some of these ‘lessons’ should have been evident at the time, we are concerned about the Home Office’s ability to put that learning into practice and prevent such an unacceptable waste of public money from happening again.”
MPs also flagged concerns that the Home Office’s bid to cut the reliance of hotels to house asylum seekers may lead to increased costs elsewhere, such as increased homelessness and pressure on local councils by driving up rental prices.
But the committee also praised work from the Home Office to boost engagement with local authorities and plans to work with the Ministry of Justice on more funding to ease the growing number of asylum appeals.
Among the report’s recommendations it urged for the Home Office to set out to the committee how it intends to reduce spending for asylum support, how it will fairly integrate asylum seekers across local councils and by when the Border Security Command will reduce the number of migrants arriving by boat across the English Channel.
Sile Reynolds, from refugee charity Freedom From Torture, said of the report: “While it’s important to recognise the phenomenal waste of public money that is the Northeye accommodation site, it is the most vulnerable people who pay the price for this chaotic approach to asylum housing.”
Responding to the committee’s findings, a Home Office spokesperson said: “We inherited an asylum system in chaos. 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.
“As part of our overall effort to cut the astronomical cost of asylum accommodation, including ending the use of asylum hotels, we have surged the number of returns, removing more than 16,400 people with no right to be in the UK, restarted asylum processing, established the new Border Security Command, and prioritised the acquisition of more sustainable dispersal accommodation.”
