Leading Tories Robert Jenrick and Oliver Dowden were on the committee that backed plans for the “rushed and misjudged” £15m purchase of an asbestos-ridden site for asylum accommodation, Whitehall’s spending watchdog has disclosed.
The then immigration minister and the former chancellor of the duchy of Lancaster were members of the small ministerial group that oversaw the purchase of the Northeye site in Bexhill, East Sussex, as the government attempted to move asylum seekers from hotels.
Jenrick, now the shadow justice minister, ultimately paid £15.4m for the abandoned prison site a year after the previous owners bought it from the Ministry of Justice (MoJ) for £6m.
The government “chose to dispense with some established processes” to acquire the Northeye site for asylum accommodation at pace, leading to increased costs.
The National Audit Office (NAO) found that the main risks on the site were ground contamination, asbestos in buildings, flooding risks and issues with mains connection to utilities. It is estimated that sorting out these problems could cost more than £20m.
Civil servants did not carry out due diligence on the former HMP Northeye prison site, which was bought as a location to house 1,200 asylum seekers as part of efforts to reduce the then £8m-a-day cost of putting them in hotels, the report said. Senior Home Office civil servants and the former chief secretary to the Treasury John Glen were also involved in the purchase.
An investigation released on Friday shows that Jenrick was warned by the Cabinet Office there were significant risks with the acquisition, but he signed the deal the following day.
Geoffrey Clifton-Brown, the chair of the public accounts committee, said: “Once again, rushed and misjudged decision-making has resulted in the Home Office overpaying for an asylum accommodation site that is not fit for purpose.”
In December 2022, the then prime minister, Rishi Sunak, told parliament he would end the use of hotels to house people seeking asylum.
A month earlier, the government established the small ministerial group, which aimed to set up the former MoD sites at Wethersfield and Scampton, the Bibby Stockholm barge docked at Portland Port, and the Northeye site to house asylum seekers. Officials from No 10 including Will Tanner were also on the committee, sources said.
Jenrick visited the site in November 2022 “and subsequently led on the acquisition through to the Home Office’s purchase of the site in March 2023”, the auditors’ report said.
The Home Office then dispensed with the usual processes to buy the site. The investigation found that the Home Office ruled that a “full business case” would not be needed to argue that the purchase was value for money, even though this was a condition for receiving Treasury approval. There was no formal “red book” evaluation of the site’s value.
Jenrick signed off the deal without pursuing advice from Matthew Rycroft, the Home Office’s most senior civil servant, that the vendors should remain liable for any identified historic contamination, the report said.
“The minister for immigration [Jenrick] approved the acquisition of the site on the same day [he received advice from the accounting officer]. A full investigation of the level of contamination and feasibility had not been completed before the Home Office entered into a contract to purchase the site,” the report said.
The site was constructed in the 1940s for the RAF, used as a detention centre in the 1980s, and acquired by the United Arab Emirates, which used it as a training centre until 2010. It then became derelict and fell into “heavy disrepair“ until Brockwell Group Bexhill Ltd Liability Partnership bought it in August 2022 for about £6.3m.
In May 2022 Clearsprings, one of the Home Office’s asylum-seeker accommodation contractors, notified the Home Office about the site. They had been approached by the investors who were in the process of buying the site alerting it to its potential use for asylum accommodation.
Initially the plan was for Home Office to lease the site for a rent of around £6m a year before they decided to buy it for £15.4m, with an extra £500,000 as part of the final purchase price along with £400,000 to the vendors in relation to legal action around the acquisition of the site. The sale price increased by around £9m in the space of a year although no planning permission was obtained for the site nor any remedial work done during that period. The Conservative party has been approached for comments.
The Northeye site was ultimately deemed unfit for its intended purpose due to contamination. In August, a thinktank blamed “woeful budgeting” at the Home Office for repeated overspending on asylum support.
Over the last three years, the department’s initial estimated budgets for asylum, border, visa and passport operations amounted to £320m.
But the Institute for Fiscal Studies (IFS) said it spent £7.9bn over the period.
A Home Office spokesperson said: “The contents of this report relate to the previous government’s purchase of the Northeye site.
“We will continue to restore order to the system so that it operates swiftly, firmly and fairly.”
• This article was amended on 15 November 2024 to name the Northeye site’s previous owner as Brockwell Group Bexhill, not Brockwell Group Bexley.
