The Home Office “cut corners” and made “a series of poor decisions”, whilst under pressure to stop migrants being housed in hotels, when it paid £15m for an asbestos-contaminated derelict prison, the government’s spending watchdog has said.
The National Audit Office (NAO) said the amount paid for the Northeye site in East Sussex, purchased in 2023 under the Conservative government, was more than twice what the seller had paid just a year earlier.
A report found “corners [were] cut” so the site could be acquired at speed to house asylum seekers, despite an assessment deeming it “high risk”, and that the site was ultimately deemed “unfit for its intended purpose due to contamination”.
The Home Office said the report related to the actions of the last government and that it remained “committed to ending the use of hotels and… achieving better value for the taxpayer”.
In December 2022, then-prime minister Rishi Sunak delivered a statement in Parliament in which he vowed to end the use of hotels to house asylum seekers, saying that the government would “work to achieve this as quickly as possible”.
In its report, the NAO said the statement “generated significant pressure within the Home Office to identify and secure sites for asylum accommodation at pace”.
It added that, the following January, a decision to acquire Northeye was taken by a small group of ministers and officials from across Whitehall, despite the “technical due diligence and approvals process not having been undertaken”.
The group included the minister for immigration and the chancellor of the Duchy of Lancaster, the report said, positions then held by Robert Jenrick and Oliver Dowden.
In February 2023, an environmental review identified a contamination risk from “asbestos-containing materials in existing buildings and contaminated ground”, while a due diligence report assessed conditions at the site as “high risk”.
The diligence report also estimated the cost of repairs to buildings at the site to be £20m, although this figure was not included in advice later submitted to ministers.
The following month, Jenrick announced that Northeye would be developed to house 1,200 people, and the sale was completed in September 2023.
The final price paid for the site was £15.4m, including £0.9m paid to the vendors – Brockwell Group Bexhill LLP – because the Home Office had underestimated how long it would take to complete the purchase.
Brockwell had bought Northeye in August 2022 for £6.3m.
The costs of remediation because of the contamination at the site were estimated to be between £1.1m and £3.6m.
The NAO concluded that the Home Office’s attempt to acquire Northeye “within just a few months… led it to cut corners and make a series of poor decisions”.
“This resulted in it purchasing a site that was unsuitable for [its] original purpose, and it paying more for it than it needed to.”
In July, the Home Office said no decision had been taken on the use of the site and that it would “consider its strategy and broader requirements before taking a view on the future use of it”.
Responding to the NAO’s report, it said: “Having inherited an asylum system under exceptional strain, with tens of thousands of cases stuck in a backlog, we remain committed to ending the use of hotels and housing people in more suitable and cost-effective achieving better value for the taxpayer”.
“We will continue to restore order to the system so that it operates swiftly, firmly and fairly.”
Sir Geoffrey Clifton-Brown, a Conservative MP and chairman of the Commons Public Accounts Committee, said that, “once again, rushed and misjudged decision-making has resulted in the Home Office overpaying for an asylum accommodation site that is not fit for purpose”.
“I am concerned that the Home Office deviated from standard practice, overlooked warnings about the condition of the site and lacked expertise to properly oversee the purchase of Northeye.”
