Last week, the Public Accounts Committee criticised the Government for ‘poor planning and bad management’ following changes to asylum seeker accommodation contracts in March 2012. Three providers – G4S, Serco and Clearel – took over the contracts from social landlords, including councils. The intention was to increase competition between them and make savings of £140 million over seven years. Two out of three of these providers – G4S and Serco – had no previous experience of providing the service at all. Yet the Home Office reportedly took a ‘hands-off approach’ – taking only three months to negotiate the contracts and failing to impose penalties on providers for poor performance. The result was unsurprising. Neither G4S nor Serco inspected the housing stock they inherited, leaving thousands of asylum seekers in unsuitable or squalid properties. Local councils were forced to step in as ‘providers of last resort’ even though they no longer had a statutory obligation to deliver the service. This should be a cautionary tale for those engaged in current, and future, market based reform programmes. In an effort to make upfront savings (in this case, £8m in the first year), the Home Office outsourced the service to a few, large […]

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