Senior Tory politicians Robert Jenrick and Oliver Dowden supported a controversial £15 million purchase of an asbestos-filled former prison to house asylum seekers, according to a Whitehall spending watchdog report.
Ministers Endorsed £15m Purchase Despite Major Risks
As part of a small ministerial group, then-immigration minister Jenrick and ex-Chancellor of the Duchy of Lancaster Dowden approved the acquisition of the Northeye site in Bexhill, East Sussex. The government planned to use this derelict property to relocate asylum seekers from costly hotel accommodation.
The National Audit Office (NAO) found that officials chose to bypass several standard processes to secure the property swiftly, resulting in increased costs and overlooked hazards. These included asbestos, ground contamination, flood risks, and inadequate utility connections, with cleanup costs potentially exceeding £20 million.
Lack of Due Diligence Led to Overpriced, Unsafe Purchase
Civil servants did not conduct thorough due diligence on the Northeye site, a disused prison previously bought by investors from the Ministry of Justice (MoJ) for £6 million just a year earlier. The plan aimed to house 1,200 asylum seekers to reduce the £8 million daily cost of hotel accommodation. Senior Home Office officials, along with former Chief Secretary to the Treasury John Glen, also participated in the decision.
An investigation revealed that Jenrick received a warning from the Cabinet Office about significant risks with the site. However, he approved the purchase the following day.
Criticism Over ‘Rushed’ Decision-Making
Geoffrey Clifton-Brown, chair of the public accounts committee, criticised the hasty decision-making process, stating it led the Home Office to overpay for a property “not fit for purpose.” In December 2022, then-Prime Minister Rishi Sunak promised to end hotel accommodation for asylum seekers.
A month before, the government had formed a ministerial group to identify alternative sites, including Northeye, for asylum seeker housing. This group also considered former MoD sites and the Bibby Stockholm barge docked at Portland Port. Sources noted that No. 10 officials, including Will Tanner, were involved in the committee.
High Costs and Bypassed Procedures
Following a visit to Northeye in November 2022, Jenrick led the acquisition, finalised by the Home Office in March 2023. The Home Office chose to skip a “full business case” assessment to prove value for money, despite this being a requirement for Treasury approval. They also neglected a formal valuation, known as a “red book” assessment, of the site.
Jenrick approved the deal without acting on advice from Matthew Rycroft, the Home Office’s top civil servant, to hold the sellers accountable for any historical contamination. The report notes that he approved the purchase the same day he received advice from the accounting officer, despite incomplete assessments of contamination levels and feasibility.
From RAF Site to Derelict Property
Built in the 1940s for the RAF, Northeye later became a detention centre in the 1980s, before being bought by the United Arab Emirates for use as a training centre until 2010. By 2022, the property had deteriorated significantly until Brockwell Group Bexley LLP purchased it for approximately £6.3 million.
In May 2022, Clearsprings, an asylum seeker accommodation provider, informed the Home Office of Northeye’s potential. Initially, the Home Office intended to lease the site for an annual rent of around £6 million but later opted to buy it outright for £15.4 million. This included £500,000 for the final purchase price and £400,000 towards legal costs, despite no planning permission or remedial work taking place within the year.
Budgeting Concerns and Home Office Overspend
Ultimately, Northeye was deemed unfit for asylum housing due to contamination issues. In August, a thinktank criticised the Home Office for “woeful budgeting,” noting its repeated overspending on asylum support.
The Institute for Fiscal Studies (IFS) reported that while the Home Office initially budgeted £320 million for asylum, border, visa, and passport operations over the past three years, actual spending surged to £7.9 billion.
A Home Office spokesperson said, “The contents of this report relate to the previous government’s purchase of the Northeye site. We will continue to restore order to the system so that it operates swiftly, firmly and fairly.”
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