8.Procurement of the replacement contracts began formally in November 2017 with the issue of an ‘Invitation to Tender’ for the Asylum Accommodation and Support Services (AASC) contracts. The new contracts will be let from 2019 until 2029 with a break clause after 7 years (compared to the 7 year long COMPASS contracts with a possible termination at five years). They have been valued at approximately £4 billion over 10 years. They will be awarded in seven lots to provide housing, transport and support services in each of the seven UK Visas and Immigration regions. The Guardian reported that the value of the new asylum housing contracts was “more than double” the cost of the existing contracts when first awarded, and awards would give equal weight to price and quality. During oral evidence it was revealed that Directors of Clearsprings, one of the contract providers, received £1.345 million in emoluments in the year ending 31 January 2018. One individual Director received £913,686 in emoluments despite the failure of the Clearsprings contract to provide suitable accommodation in a number of cases. The Immigration Minister commented: “I do not think anybody having a salary of that level is appropriate, whatever business they’re in”.
9.Concerns were raised when a second procurement exercise (known as AASC (2)) had to be issued on 21 May 2018 because no compliant bids had been received for asylum support in the North East and Yorkshire and Humber region and in Northern Ireland. Owing to the passing of six months between the issue of the first and second procurement exercises, some elements of the second procurement process were to be expedited under regulation 29(10) of the Procurement Directive; the Home Office also announced that it would speed up some of its internal governance procedures.
10.We wrote to the Immigration Minister seeking further information about the reasons for the retendering exercise and, in particular, the reason why the Contract Notice for AASC(2) had omitted a reference to working with local authorities, which had appeared in the original notice. The Immigration Minister replied to us that officials were “satisfied that the lack of bids was due to technical reasons rather than a general lack of interest in providing the services in these regions”. She assured us that the requirements for the second procurement exercise were based on an “identical” set of requirements to the original procurement and that the Government was:
[ … ] ensuring that there is sufficient resource focused on transitional activity within these regions, undertaking planning activity upfront and ensuring that lessons from the regions in the first lots are carried into this work. In parallel, we are developing contingency options and we will manage risks and their mitigations and contingency measures very closely over the coming months. We remain confident of having a fully operational contract before the expiry of the current arrangements, with sufficient time to properly transition the services.
11.Our 2017 report had identified the importance of addressing problems in the relationship between central and local government over the management of the asylum system. Local authorities may choose to participate in supporting the asylum system, but many do not.
12.We recommended that local authorities should be closely involved in developing the replacement to COMPASS and that the regional Strategic Migration Partnerships and, where appropriate, the devolved governments should be given a significant role in ensuring the fair distribution of accommodation. We noted, however, that the Strategic Migration Partnerships were poorly funded and overstretched, and therefore also recommended that these arrangements should be more sustainably and consistently funded so that they were better able to carry out a strategic role. We recommended that local authorities be given more control over where asylum accommodation is located and that decisions by local authorities to refuse requests because of concerns over the quality or concentration of accommodation, the capacity of local health, education and other support services, and risks to social cohesion should only be overturned by the Home Office in exceptional circumstances.
13.In its response the Government defended voluntary participation in the dispersal system and said it would continue to engage in constructive dialogue with Strategic Migration Partnerships; the existing consultation procedures between the Home Office, providers and local authorities would enable local authorities to influence the location of asylum accommodation and would ensure the impacts on local communities and services were taken into account. It said that Strategic Migration Partnerships had been given additional funding to support resettlement schemes.
14.Witnesses had contrasted the operation of the existing asylum accommodation scheme with the Syrian Vulnerable Persons’ Resettlement Programme (SVPRP). That scheme had succeeded in persuading many local authorities to participate because it had provided a level of funding to cover ongoing costs of services for these vulnerable people and had involved local authorities closely in the development of the scheme.
15.This contrasted with the limited opportunities afforded to local government to influence the location and quality of asylum accommodation, together with an absence of funding support for the impacts on services which vulnerable residents may present. In consequence, the Government was struggling to engage local authorities with dispersal, meaning that the task of supporting asylum was being carried disproportionately by a relatively small number of authorities.
16.In August 2018, fourteen local authorities in Yorkshire wrote to the Home Secretary to express concern about the operation and retendering of the asylum accommodation contracts. The Guardian reported that the letter, seen by the Yorkshire Post, reads:
For too long, asylum dispersal has been implemented as something done to local authorities and communities in the north of England rather than done with them in partnership, with little heed paid to concerns raised about cohesion or disproportionate concentrations of asylum seekers in our towns and cities.
A number of local authorities have regularly expressed these immigration concerns to the Home Office and immigration ministers, but we have experienced little urgency in addressing them.
Being an asylum dispersal area is voluntary and some local authorities in our region have over recent months been giving serious consideration to actively pursuing withdrawal.
The current process of procurement for the new asylum system is making this outcome increasingly likely, whilst for potential new areas there is reduced incentive to join. We fear that the Home Office continuing the current approach risks catastrophic failure of the new asylum system as soon as it begins.
17.We have heard informally that other authorities, as well as Andy Burnham, the Mayor of Greater Manchester, have since written to the Immigration Minister or to the Home Secretary in similar terms. These letters draw attention to:
18.The UK’s proud tradition of providing asylum relies on the support and consent of local communities, many of which have a long history of welcoming those in need of sanctuary. We are deeply concerned that the Government’s handling of the replacement for the COMPASS contracts has led dispersal authorities to consider, as a last resort, withdrawal from participation in the dispersal scheme. With a significant percentage of asylum seekers located in these regions, withdrawal of these areas would impact heavily upon vulnerable individuals and on the wider operation of the dispersal policy. It is essential that this outcome is avoided by making sure that participating local authorities have a genuine partnership role in the new contracts.
19.The Minister’s letter to us of 1 November referred to the new contracts as “an opportunity to reset the relationship with local authorities and other delivery partners”. Council leaders told us that changes to this relationship were badly needed. Following the problems with the introduction of COMPASS, and in light of their concerns about distribution, clustering, inadequate monitoring of accommodation and the lack of financial support for their additional costs, they needed substantial assurance that the Government was actively seeking improvements. They welcomed recent “movement” by the Home Office to respond to their concerns. However, they told us they could not trust these statements unless they were written into the new accommodation contracts or, as in the case of financial support, otherwise acted upon by the Government. We also heard that some Local Authorities were interested in bidding to be providers themselves but felt put off by an application system that they claimed seemed designed for the existing providers.
20.The relationship between Government and local authorities on these issues can be very different, as was shown by the Syrian Vulnerable Persons’ Resettlement Programme (SVPRP):
The Syrian scheme was based on a completely different approach, where the Home Office essentially said to local authorities, “What capacity can you offer?” That secured a very, very wide range of participation. There was also clear understanding that the funding level would be not great but getting towards sufficient … [It] built a sense of confidence that at official level, both in local government and in the Home Office, there was a different way of approaching this whole issue that was more functional and more effective.
21.By contrast, we were told that with these new contracts the Home Office was “reverting to type” in its approach to local authorities, appearing driven by the desire to manage the programme “as cheaply as possible and then shunt any consequent costs on to local government”.
22.The Minister said that the Government’s decision to extend the COMPASS contracts from 2017–19, in spite of the recognised problems with those contracts, enabled the Government to “engage in a lengthy consultation process both with local authorities and with NGOs to make sure that the new contract going forward would be an improvement”. Andy Burnham, however, told us that there “has been no meaningful engagement in the construction of this new contract” and that it was “effectively a rollover for the next seven to 10 years of what we have had since 2012”. Councillor David Simmonds told us that the Home Office had made “fairly minimal efforts to reach out”, which failed to match best practice for engagement with stakeholders in public sector procurement.
23.The Government had consulted with local authorities during the design of the new contracts: once the formal procurement process began the authorities were effectively shut out, for reasons of commercial confidentiality. Local authorities in Yorkshire and Humber, for which a second invitation to tender had to be issued, were particularly disturbed as they perceived that “information had been deliberately kept from us earlier this year regarding the unsuccessful procurement for the contract in our region.”
24.The Government told us that it had learned the lessons from the extended transition to COMPASS. It planned to allow eight months for transition in 2019 and has also taken other steps to ensure transition runs more smoothly, including the creation of a dedicated support team within the Home Office. Nonetheless the timetable has slipped, with the signing of the contracts that was originally anticipated in the autumn of 2018 now expected in early 2019. The longer transition period may therefore be compromised.
25.The Government has developed contingency plans for the provision of accommodation and related services during the transition period but it has not shared them with local authorities because those services “are not provided directly by local authorities”. Nonetheless, as in 2012, local authorities will have an active role to play during the transition, for example, by supporting asylum seekers who are waiting to hear whether a change in provider means they will be forced to move; arranging for children in asylum-seeking families to move schools at an appropriate time, if contractual changes necessitate the move; licensing any new housing in multiple occupation (HMOs) and managing community concerns about changes in accommodation arrangements, particularly if emergency accommodation such as hotels has to be deployed. All of these activities require effort and resource.
26.Local authority responsibilities for safeguarding, providing education and other public services, licensing HMOs, managing community impacts and preventing destitution mean that they have a very clear interest in the progress of the contracting process, and they also need to be able to plan for the transition. The decision not to share risk management information and contingency plans with them, after the experience of introducing COMPASS, is ill-judged.
27.In its 2014 report on the transition to COMPASS, the NAO highlighted that the transition was made more challenging for the Home Office by the requirement in 2012 to divert staff to other priorities, specifically, work at the UK border during industrial action by Border Force staff; and support for the Olympics programme. On 13 November, during a discussion about Brexit planning, Sir Philip Rutnam and senior officials told us that the Home Office was considering how to redeploy staff for Brexit, specifically in the event of no deal.
28.The Government must recognise that the introduction of these contracts, valued at approximately £4 billion over 10 years, remains a priority. A botched transition would have immediate repercussions for some of the most vulnerable individuals in society and, if it were to result in the withdrawal of authorities from the dispersal system, could present a significant risk to the Government’s ability to meet its statutory responsibilities for the asylum system. Staff responsible for managing and supporting the transition to the new contracts should be protected from other demands, including dealing with Brexit pressures.
29.On 19 November 2018 the Government wrote to the Local Government Association (LGA)’s Asylum, Refugee and Migration Task Group with various proposals, including a commitment to work with local authorities to establish what a “more equitable distribution” of asylum seekers would look like; to work with local authorities to consider different approaches to the allocation of different asylum seekers to different areas; to review clustering; and to do further work with the LGA to understand the “nature and scale” of the costs to dispersal authorities from supporting the asylum and refugee system. The local authority leaders told us that the letter was “rich in aspiration” but, Councillor Simmonds cautioned, local authorities would not be convinced unless they saw “a great deal more engagement … in both the procurement and implementation of the contracts and the management of those contracts subsequently”, that the new contracts would work better than COMPASS. Councillor Lawrence agreed that the Government had missed an opportunity to involve local authorities as strategic partners but suggested that there was “still the opportunity to claw that back”.
30.Local authorities saw joint oversight of the new contracts, between the Government and local authorities, as the fundamental requirement for a more effective system in the future. As Councillor Aitken described to us, local authorities are “the people who know what is actually happening in our communities and what the sustainability of different parts of our own authorities are”. Andy Burnham told us that the starting point for the authorities he represented was that, currently,
There is not sufficient oversight of the contract … we have very poor accommodation and people not treated fairly.
… We are being a voice for people who are left unsupported in communities and, therefore, not in good accommodation, not able to integrate with the local community. It is about us jointly managing the contract, overseeing the level of provision, calling unscrupulous landlords to account, getting action taken where accommodation is not good enough, having funding to support people with English as a second language, levels of funding that properly support their integration and working with our voluntary sector to do that. That looks to me like a partnership.
31.He also said that, having recently met the Immigration Minister, he believed that both she and the Home Secretary “seem to get” the problem; ministerial engagement was key to resolving these issues. He called on the Government to let local authorities see the contracts before they were “set in stone”.
32.As steps towards better engagement with local authorities, the Government offered a series of meetings of the LGA task group, on which the Minister sat, to look at issues such as dispersal, clustering and funding essential services. The Government was also looking to establish joint partnership boards which would include representatives from local authorities, the health sector and from the police, as advised by Strategic Migration Partnerships. These, however, would be designed to “help us [the Government] with the transition”: once the transition had been completed new arrangements would be needed for ongoing management of dispersal at the regional level. We were told the national-level committee would meet for the first time before Christmas.
33.While we welcome the Minister’s recent acknowledgement of the “huge role” which local government plays in supporting asylum seekers and refugees, we are concerned at how little time there is for the development of an effective strategic partnership with local government before the transition to the new contracts. The Government’s words about developing an understanding of the impact of dispersal on authorities, and seeking to mitigate these impacts and authorities’ currently unfunded costs, are encouraging but, with only a matter of weeks before the new contracts are signed, there is little evidence that the change in the Government’s approach goes beyond words.
34.We regret that the issues raised in the Committee’s previous report persist, and that the Government has not taken the opportunity to act upon many of our recommendations. We are concerned that the Government did not accept our previous recommendations for changing the commissioning process in time for these contracts, and we continue to believe that wider changes are required. We reiterate our belief that local authorities should be closely involved in developing the replacement to COMPASS.
35.We are disappointed that the Government has not taken up our suggestion for the commissioning of asylum accommodation to be devolved to the regional Strategic Migration Partnerships or our recommendation that local authorities should have essentially joint decision-making powers so that their refusal of provider requests for asylum accommodation are only overturned in exceptional circumstances.
36.The next few weeks present a vital opportunity for the Government to make the provision of asylum accommodation work better for everyone: first and foremost, for asylum seekers but also for the dispersal authorities, providers, communities housing asylum accommodation and other stakeholders. To succeed the Government must, in the words of the Independent Chief Inspector of Borders and Immigration, start by building each of the parties’ confidence that they can “trust the intentions and actions of the other”.
37.The Government must act now to reset its relationship with local authorities on asylum accommodation: it must realise its recent commitment to understand those authorities’ concerns better and provide clear evidence of improved funding support for the full range of impacts they are required to address. In return the Government should be able to draw upon these authorities’ experience to manage the distribution of asylum seekers more fairly and have their assistance in facilitating and maintaining sufficient accommodation which meets the contractual standards. An improved relationship will require better cooperation between key stakeholders. If this is not secured soon the relationship will become unsalvageable and some local authorities may withdraw altogether. We reiterate our previous recommendation that the Government should insist on formal, regular meetings between providers, local authorities and the third sector (and devolved governments) to coordinate their activities and address concerns about clustering and community cohesion. Local authorities must have a stronger role in decision making under the new contracts, and a more significant role in oversight of performance of them.
38.As a first step the Government should consult local authorities on the full details of the proposed contracts before they are finalised. In view of the current timetable for signing the contracts this would need to be done within the next few weeks. If the Government acts with sufficient urgency we believe this can be done without significant detriment to that timetable. This action would help to build dispersal authorities’ confidence in the Government’s commitment to develop an equitable, strategic partnership with its local partners.
7 18 November 2017. The support services contract for Advice, Issue Reporting and Eligibility (known as AIRE) was notified in May 2018 ( 4 May 2018). This contract covers eligibility assistance and complaints, advice and guidance services.
8 , 18 November 2017 section II.1.5
9 The Accommodation and Support Contracts will operate as seven regional contracts. This will create separate contract regions for each of the devolved nations: Scotland, Wales and Northern Ireland, whilst retaining four English regions. The English regions will be: the South; the Midlands and East of England; the North West; and the North East and Yorkshire and Humber.()
10 The Guardian, 23 November 2017
13 , 24 May 2018
14 13 July 2018
15 13 July 2018
16 Home Affairs Committee, Twelfth Report of Session 2016–17, , HC 637
17 Home Affairs Committee, Twelfth Report of Session 2016–17, , HC 637, paras 45–48
18 Home Affairs Committee, Twelfth Report of Session 2016–17, , HC 637, January 2017, paras 56–58
19 Home Affairs Committee, . HC 551, p 9
22 , The Guardian, 7 November 2018
23 Letter from the Immigration Minister to the Committee, 1 November 2018
31 Barnsley Council and Local Authorities in Yorkshire & Humber, (
32 Barnsley Council and Local Authorities in Yorkshire & Humber, (
33 , 1 November 2018, p 2
35 , 1 November 2018, p 3
36 , 1 November 2018
37 National Audit Office, , January 2014, para 2.3
38 13 November 2018, Qq100–112
39 , 19 November 2018
46 , 19 November 2018
50 ICIBI, , February-June 2018, p 2
Published: 17 December 2018