G4S loses out as Home Office announces 10-year asylum housing contracts

Major government contractor G4S fails to win any bids in the latest contracts round.

G4S headquarters. Photo: PA.

Two major government contractors have not retained contracts for asylum seeker accommodation that they have been running for the last seven years, in the latest round of Home Office contracts.

The Home Office handed out seven contracts last week worth a combined £4bn to provide accommodation for asylum seekers living in the UK. It also handed out a separate contract for an overhauled national service to provide advice and guidance to asylum seekers and deal with complains about their accommodation, which the department said would make the asylum process easier to navigate.

The ten-year contracts form part of the Home Office’s Asylum, Accommodation and Transformation Project (AAST), part of the Government Major Project Portfolio. They replace the COMPASS contracts, which were awarded in 2012.


The outsourcing giant G4S, which held two of the six regional COMPASS contracts, did not win any contracts in this round. It has lost the right to provide asylum accommodation in the Midlands and the East of England to its rival Serco, and in the North East, Yorkshire and Humberside to Mears Group. The two contracts are together worth an estimated £1.4bn.

Serco also lost one of its COMPASS contracts in this round. When the new system comes into force in August, it will relinquish control of accommodation housing in Scotland and Northern Ireland, for which it gained national media attention last year over its attempt to evict some tenants.

Although it lost the Glasgow contract, Serco did win contracts for two regions worth an estimated combined £1.9bn – which the company said was its largest ever contract award. It will continue to manage asylum housing in the North West of England, as well as taking over the Midlands and East of England regions.

Mears Group, a housing and social care provider that has not previously managed asylum housing, will manage Serco’s former Scotland and Northern Ireland regions, which have been divided into two separate contracts, as well as the North East area.

Clearsprings will retain control of housing in Wales and the South.

The charity Migrant Help will run the Advice, Issue Reporting and Eligibility (AIRE) service, which consolidates two advice and application support services the charity has run on behalf of the department since 2014. The contract will allow it to provide "more hands-on support during the post-[asylum application] decision period, making sure that clients are aware of their options, whether the decision has been positive or negative", according to chief executive Andrew Billany.

Announcing the contracts, immigration minister Caroline Nokes said they would "make sure that asylum seekers are treated with dignity and respect in safe, secure and suitable accommodation".

"They will deliver compassionate support through a new integrated service and make the asylum system more accessible and easier to navigate," she said.

A spokesperson for the Home Office said the contracts had been awarded "following an open, fair and rigorous procurement process" and declined to comment further.

"Smooth transition"

While managing asylum accommodation in Scotland and Northern Ireland, Serco became embroiled in a high-profile row over its attempt to use ‘lock-change’ powers to evict 300 tenants in Glasgow whose applications for asylum had been rejected. The move sparked controversy and protests, causing it to pause the plans.

Under the AAST contracts, Serco will be responsible for housing, transporting and providing a range of other welfare services to around 20,000 asylum seekers living in more than 5,000 properties.

The outsourcer said that although the “core service lines” in the new contracts were “similar” to those of COMPASS, there had been a number of improvements and changes to contract terms.

These included the "introduction of volume caps and certain other protections for surge events; greater graduation of volume charging bands; improved inflation protection; and mechanisms for handling certain other risk scenarios and change events", it said.

G4S's loss of its two COMPASS contracts follows a rocky year for the contractor, which was forced to hand over control of Birmingham Prison to the Ministry of Justice last August over safety concerns.

Responding to this week’s announcement, G4S managing director for COMPASS, Gordon Brockington, said the company would “ensure a smooth transition” to the new providers.

"Our existing asylum seeker accommodation contracts will end in August 2019 and we remain committed to delivering them to a high standard until the new service providers assume the contracts later this year,” he added.

SRO named

This week the Home Office also published a letter confirming Sean Palmer, its interim director of immigration and protection, as the senior responsible officer for AAST. The letter from Home Office permanent secretary Sir Philip Rutnam and Tony Meggs, then head of the Infrastructure and Projects Authority to Palmer, dated 21 November, said Palmer would have “personal responsibility” for the project’s delivery until its completion, which is scheduled for October.

“Yours is one of a number of strategic projects supporting Home Office transformation. As SRO, you are responsible for ensuring that your project delivers the strategic capabilities needed to support Home Office plans for transformation, in line with the deliverables agreed for your project as part of future Spending Review allocations."

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