COMPASS: Provision of asylum accommodation - Public Accounts Committee Contents

2  Performance and costs

14. The Department told us that it had introduced the COMPASS contracts with the aim of reducing costs and raising the quality of asylum accommodation. Progress on both counts has not been as swift as the Department had anticipated.The Department explained that the COMPASS contracts require all three contractors to provide accommodation that meets the Decent Homes Standards—the recognised standard for social housing—a criterion that had not been required by the earlier Target contracts.[26]The Department monitors contractors'performance against nine key performance indicators designed to increase the quality of services and accommodation provided. Three of these indicators relate to the standard and quality of accommodation.[27] The Department said that it applies penalties for failure to meet the levels of performance set out in the performance indicators, for example if contractors fail to disperse asylum seekers to properties within nine days of an accommodation request being made by the Department, and if they fail to resolve complaints within five working days.[28]

15. Over a year into the contract, contractors have remained slow in addressing substandard accommodation for a very vulnerable group of people. While the reported quality of asylum accommodation, as measured by the key performance indicators, suggested overall improvements by the end of 2013, G4S and Serco were still failing to meet key performance indicators on contractual property quality standards for accommodation.[29] The Department acknowledged that its performance management of the COMPASS contracts should have been stronger.[30] It could have invoked service credits from January 2013, when the contracts became operational, but only did so for Clearel. The Department began to extract penalties from all three contractors for poor performance only from July 2013; and only in January 2014 had it reached agreement on the level of penalties owed by G4S and Serco for the period January to June 2013,which amounted to over £3 million. The Department told us it expects to receive all penalties owed by the end of March 2014, and stated that it had decided not to invoke the penalties earlier because of the commercial discussions with its contractors relating to the information provided during the tendering process.[31]

16. Given the poor standards of accommodation reported in the Comptroller and Auditor Generals' report and the numerous individual cases reported directly to us, we were concerned that the system for asylum seekers to register complaints is not working effectively.[32] The Department has accepted that providers are not recording complaints consistently, and that the quality and reliability of management information on complaints is poor. There have also been disagreements between the Department and providers over whether particular communications are queries or complaints, and this has been the subject of ongoing discussions.[33]We asked the contractors about suggestions that complaint packs had not been routinely supplied to all asylum seekers. G4S told us that complaint packs should be handed out to asylum seekers when they arrive at their accommodation as part of the induction process, and it undertook to look into whether these had not been.[34]

17. The move from the Target contracts to COMPASS was driven largely by the savings the Department estimated it could achieve. COMPASS was designed to make savings of around £140 million over the maximum seven year lifetime of the contracts, against a total expenditure of £700 million.[35] The Department made savings of £8 million in 2012-13, which appears to us to be below where the Department needs to be to meet its overall target, although it told us it expects to have saved about £27 million over the first 18 months of COMPASS.[36]

18. The level of savings secured by the Department has been affected by the additional costs incurred by extending the previous contracts during the transition period, and its higher than anticipated level of involvement in the running of the new contracts.For example, the Department confirmed that it had had to introduce an inspection regime, and employ more inspectors,because of the need to improve the poor quality accommodation inherited from the Target contractors.[37]

19. PASS contractor to complete transition on time, becoming fully operational across both of its new contracts from late September 2012. G4S and Serco both took a further three months to become fully operational (late December 2012) and acknowledged that the contract was more complex than they had anticipated at the outset.[38]Despite the delays, transition to COMPASS was completed before the extensions the Department had negotiated with the outgoing contractors expired.[39]

26   Q106; C&AG's Report, paragraph 1.11 and figure 3 Back

27   C&AG's Report, paragraph 3.2 and figure 6 Back

28   Q140 Back

29   Qq62, 64, 90; C&AG's Report, paragraph 3.4 and figure 12 Back

30   Q149 Back

31   Qq94, 114-117, 120-122, 129 Back

32   Qq45-48, 50-53 Back

33   C&AG's Report, paragraph 3.22 Back

34   Q55 Back

35   Qq106, 112, 136 Back

36   Q111; C&AG's Report, paragraph 1 Back

37   Q135; C&AG's Report, paragraph 3.13 Back

38   Qq8, 27, 29, 33; C&AG's Report, paragraphs 2.1 and 2.22 and figure 5 Back

39   C&AG's Report, paragraph 2.6 Back

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Prepared 24 April 2014