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Opinion: From asylum housing to global housing management; G4S and Serco reveal their plans

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Opinion: From asylum housing to global housing management; G4S and Serco reveal their plans

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Published by Max Salsbury for 24dash.com in Housing and also in Care and Support, Central Government, Communities

Government urged to act pver '180% rise' in destitute asylum seekers Government urged to act pver '180% rise' in destitute asylum seekers

By John Grayson

On 25 June security corporations G4S and Serco were summoned to the Home Affairs Committee hearings on asylum housing.

They faced questioning from MPs briefed by campaigners about the many problems of appalling housing conditions and shabby housing management exposed over recent months, particularly in G4S contract areas in the Midlands, East of England, Yorkshire and the North East.

In these areas G4S houses 11,000 asylum seekers under the Home Office’s COMPASS contract.

The COMPASS contract, described by the Committee chair Keith Vaz as “massive”, and “the second biggest contract the Home Office gives out” is worth potentially £1.7 billion over five years

The contracts are outsourced from the Home Office and totally funded by the taxpayer. Thus asylum housing is publicly funded ‘social housing’ – the rents are paid direct to private landlords as part of the contracts.

Until last June a series of “Target” contracts operated for the provision of asylum housing, which in many cases were coordinated by local authorities who also provided part of their housing stock and “asylum teams” of housing officers to oversee management.

Local authorities coordinated a range of housing associations, private landlords and companies. From June 2012 asylum housing was privatised by the coalition government and the contracts given to three security companies: G4S, the largest security company in the world, alongside Serco and the smaller Reliance.

From June 2012 to December 2012, in the G4S contract areas 3,000 asylum seekers and their families were transferred from council accommodation to a series of G4S subcontractors. This ‘Transition’ process was monitored by asylum rights organisations and asylum seeker tenants and a range of well publicised housing abuses by G4S and its subcontractors were exposed – including the allocation of filthy, substandard properties; and “no choice” low standard accommodation to women and small children, sometimes in areas of high crime and racist harassment.

Housing management abuses involving widespread invasions of privacy and harassment of asylum seekers and their families were reported in the Children’s Society Report in January 2013 on the findings of a Parliamentary panel on asylum support for children and young people, convened by Sarah Teather MP.

A dossier of evidence with a range of case studies from G4S asylum housing in Yorkshire and the North East was sent to the committee by SYMAAG (South Yorkshire Migration and Asylum Action Group) and a range of national asylum rights organisations in February.

Keith Vaz and the Committee members David Winnick Labour MP for Walsall and Dr Julian Huppert Lib Dem MP for Cambridge made good use of the briefings, and also written evidence from John Perry on behalf of JRF (Joseph Rowntree Foundation), and from the Local Government Association.

At the committee the two witnesses, Stephen Small, G4S managing director for Immigration and Borders, and Jeffery Stafford, Serco CEO for the UK and Europe, were asked for financial details of the contracts and the profits they were making.

Chair Keith Vaz put it bluntly: “You obviously put in a bid that was quite low; that is why you got the contract.”

Serco’s Jeremy Stafford did start to unravel the funding of the contracts. He claimed that the COMPASS contract paid Serco £11.71 for each single person in dispersed asylum housing each night, and £30.28 per night for each single asylum seeker in dispersal centres like Birley Court in Liverpool.

Remarkably, he suggested that so far as their main subcontractor in Scotland and Northern Ireland, Orchard and Shipman, were concerned, Serco handed on all but 21p per person per night to them.

This statement astounded Vaz: “You are telling this committee that Serco makes 21p per asylum seeker?”
Jeremy Stafford: “That is correct.”

Later Vaz came back to the point: “At the moment Mr Stafford I am not sure what your shareholders are going to say, but 21p does not sound a huge amount of money for one of the biggest service providers in the world.”

Descending into business hype Stafford said that Serco was “Very focused on building an accommodation business….we felt that we could establish a very good platform that we felt was scalable…..some of the services that we develop in the United Kingdom we then go and take to other geographies….For us, we felt accommodation management was an important development area”.

In fact Serco admitted what campaigners had always suspected; that the G4S and Serco bids were, in effect, ‘loss leaders’. The outsourced and privatizing housing contracts would give the security companies experience in asylum markets as a way into asylum and mainstream housing markets in the UK and abroad.

In his evidence Small valued the G4S part of the national contract as worth between £150-£200 million over five years. Other evidence to the committee from the Joseph Rowntree Foundation (JRF) had suggested (citing a letter from the Chief Secretary at the Home Office on 26 April) that the potential size of the national contracts could in fact be up to £1.7bn over five years.

John Perry in his JRF evidence said that the Home Office, as part of its own immediate drive for austerity cuts, wanted the contractors to spend only around £124m in 2012/13, a massive cut of 50% on the final year (2011/12) of the local authority coordinated ‘Target’ contracts.

In their written evidence to the committee a coalition of all the national local government associations stated that: “Concerns remain regarding the long term sustainability of the (COMPASS) project and the impact that the emphasis on driving down costs will have on the quality of service provision for asylum seekers, and indeed, on the communities where they are placed.”

In fact cutting costs has produced a short term crisis of “sustainability” for G4S and its subcontractors who house 11,000 asylum seeker tenants under COMPASS contracts.
When Leeds City Council intervened to prevent the G4S subcontractor Cascade Housing from allocating substandard properties to asylum seekers, the Home Office suspended Cascade from housing any new asylum seekers from December 2012 to May 2013.

A leaked memo from Stephen Small on 25 February was raised by Keith Vaz at the Home Affairs Committee. The memo admitted “property defects” and failures in housing management or “pastoral care” as Small put it. It also revealed that cost cutting had forced Mantel the G4S subcontractor in the West Midlands off the contract, and had brought Live Management to its financial knees.

G4S has now had to take over direct housing management of all Mantel’s contracted properties and by 1 July it had transferred all housing management staff from Mantel and Live Management to direct employment by G4S. Live Management is retained as merely a lettings agent across the East of England, the East Midlands and South Yorkshire, and a new company Fentons replaces Mantel.

The subcontracting companies which are surviving under COMPASS are those, like Jomast Developments in the North East, who directly own a large stock of asylum accommodation. The funding details revealed at the Home Affairs committee suggest that Jomast is receiving some £22,000 per month in public funds for its controversial substandard asylum hostel in Stockton housing 30 mothers and 38 babies and toddlers under 18 months. Large asset rich companies like Jomast use the guaranteed rental income from asylum housing as collateral on further loans in the property development market.

The corporate politics and policies of G4S and Serco in their “detention estates” and “asylum markets” raise a catalogue of ethical and housing management issues for mainstream housing markets and social housing provision.

Dispersed asylum seekers lost practically all their rights as tenants in the 1999 Immigration and Asylum Act. They have to accept “no choice” housing whatever its condition, or wherever it is. If they protest or seek better conditions the Home Office will order their eviction and move them. It is not really surprising that G4S and Serco saw asylum housing tenants, with asylum seekers demonised by politicians and the media, and bullied by the Home Office, as useful guinea pigs for their housing management ambitions.

These ambitions may well be beginning to be thwarted after revelations from hearings at the Home Affairs Committee. The evidence sent to the committee from Yorkshire and the North East resulted from asylum seeker tenants themselves being willing to speak out, working alongside asylum rights campaigners and tenants and residents associations, including support from KFTRA (Kirklees Federation of Tenants and Residents Associations) the largest ‘fed’ in England.

In Glasgow, Serco asylum housing tenants have formed tenants and residents associations, and on 19 March asylum seekers and their supporters invaded a ‘consultative’ meeting held in Stockton by G4S/Jomast for “stakeholders” demanding representation.

At present the coalition government is firmly behind G4S staying in control of its COMPASS contract as immigration minister Mark Harper said in a written answer on 19 June.

"G4S performance is satisfactory. Where shortfalls in performance have been identified the performance regime has been applied and improvement plans developed and implemented."

The real question, of course, is whether taxpayers are willing to see £1.7bn of their money given to G4S, Serco and Capita/Clearel (successors already to Reliance on the contract) over the next five years to provide substandard housing to thousands of the most vulnerable tenants in the UK housing market.

Taxpayers’ money is being used to pump prime the corporate business ambitions of G4S, and Serco, to further extend their controversial “asylum housing markets” across the globe. Housing organisations and housing professionals should be joining with the Local government associations, JRF, and a majority of asylum rights organisations, and most important of all, asylum seeker tenants, to stop them.

John Grayson is a member of the South Yorkshire Migration & Asylum Action Group (SYMAAG).

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