Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Not Addressed
Home Office awarded major accommodation site contracts without full competition, citing urgency.
Conclusion
We asked the Home Office why it had not submitted to competition five of the contracts relating to the new sites, worth £243 million of the £253 million it had spent through contracts. The Home Office told us that it used framework agreements for some 18 Q 159; HM Treasury, Dear Accounting Officer Letter – Parliamentary Communications, 16 January 2024 19 Qq 179, 203; C&AG’s Report, Asylum accommodation, Figure 5 and Figure 6 20 Qq 166–167; C&AG’s Report, Asylum accommodation, Figure 7 21 Qq 170–173, 177, 198, 202 12 Asylum Accommodation and UK-Rwanda partnership contracts, which would have had a competition for the initial framework. It again justified this approach because there was an “emergency” and it needed to operate as quickly as possible.22 We have previously reported how competition can help support efficiency, innovation, and quality in public services, but that while framework agreements had become the most prevalent route for government to buy goods, inappropriate use of frameworks may lead to competition being limited by having insufficient suppliers for a mini competition.23 In the case of the contract for procuring the Bibby Stockholm vessel, there was only one supplier on the framework used, which meant there was no opportunity for competition. The Home Office also outlined how it had amended some existing contracts with providers, but that these contracts included checks and balances, such as a profit cap over which the suppliers have to return a certain amount of profit, and that the profits are regularly reviewed. The Home Office suggested that setting up new contracts “would have added risk”. We asked for assurance that when these contracts come to an end there will be an opportunity that they will be properly fully competed. While the Home Office said this would be the case, it caveated that this would be “where time permits”.24
Government Response Summary
The government states it agrees and has implemented the recommendation, outlining measures to improve cost profiling, technical expertise, and due diligence for site selection and delivery, but does not address the committee's concerns about the lack of competition in past contracts or provide assurance for future competitive tendering.
Government Response
Not Addressed
HM Government
Not Addressed
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 A raft of measures has been implemented to address weaknesses. The programme was recently restructured to deliver smaller sites, requiring lighter touch refurbishment and supporting the reframed strategic aim to deliver a flexible accommodation-estate that can respond with agility to changes in demand. 2.3 Lessons have been learned regarding cost profiling and projections: the programme has improved technical construction expertise to ensure that a more accurate estimation of set up and delivery costs is better considered for future sites. Accounting officer advice including value for money assessments and business cases are completed for each site. Alongside significant work to lower operational costs, this will further assure the value the programme offers to the taxpayer. 2.4 The Asylum Support, Resettlement and non-detained Accommodation Programme ASRA) has balanced the requirement to deliver accommodation at pace to meet changing demand and brought forward due diligence to enable decisions around viability and value for money to be taken at an earlier stage, reducing potential cost and commercial risk. It has also improved engagement with local authorities and partners, introducing this at an earlier stage. 2.5 As a result of these measures, an independent review undertaken by the Infrastructure and Projects Authority found that successful delivery of the programme to time, cost and quality appears feasible.