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 Standardsthe
recognised standard for social housinga criterion that
had not been required by the earlier Target contracts.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.
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.
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.
The Department acknowledged that its performance management of
the COMPASS contracts should have been stronger.
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.
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
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
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.
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.
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.
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.
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 delays, transition to COMPASS was completed before the extensions
the Department had negotiated with the outgoing contractors expired.
26 Q106; C&AG's Report, paragraph 1.11 and figure
C&AG's Report, paragraph 3.2 and figure 6 Back
Qq62, 64, 90; C&AG's Report, paragraph 3.4 and figure 12 Back
Qq94, 114-117, 120-122, 129 Back
Qq45-48, 50-53 Back
C&AG's Report, paragraph 3.22 Back
Qq106, 112, 136 Back
Q111; C&AG's Report, paragraph 1 Back
Q135; C&AG's Report, paragraph 3.13 Back
Qq8, 27, 29, 33; C&AG's Report, paragraphs 2.1 and 2.22 and
figure 5 Back
C&AG's Report, paragraph 2.6 Back