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Former Conservative minister and current Shadow Justice Secretary Robert Jenrick, and his colleague the former Deputy Prime Minister Oliver Dowden, wasted £15.4 million of taxpayers money by fast tracking the purchase of a site for an asylum centre in Sussex which could not be used due to its contaminated land and asbestos-ridden buildings, a new National Audit Office (NAO) report reveals.
The Home Office purchased the site despite officials highlighting “significant risks with the acquisition” to Jenrick.
Repairs to the site would have cost a further £20 million to complete, according to the report.
The owners of the property in Bexhill – used variously as a former RAF station, a prison, and latterly, a military training centre for the United Arab Emirates and left derelict for 12 years – made a profit of over £9 million on the deal within eight months.
The report, published Friday, is scathing about the deal which broke Whitehall rules in the rush to find sites that could replace hotels used by asylum seekers.
The Home Office used a private company to negotiate with the the owners, a limited Liability company called Brockwell Group Bexhill, which had been set up only a month before the sale.
The Home Office later learned it was built on contaminated land and the buildings were full of asbestos, meaning they could not use it to house asylum seekers.
The NAO report reveals that the last Government set up a small ministers group, chaired by Dowden, then Chancellor of then Duchy of Lancaster, to drive through the plans. Jenrick, then immigration minister, visited the site and took a leading role in purchasing it.
According to the NAO, the Home Office was originally alerted to the Bexhill property in 2022 by Clearsprings, a private company which makes about £1 billion over 10 years housing asylum seekers at Napier Barracks in Kent and in Wales. Clearsprings is one of three contractors helping the Home Office identify sites for asylum accommodation.
The vendors of the Northeye site approached them in order to offer the site to the Home Office. Clearsprings were negotiating leasing the site on behalf of the Home Office up until August 2022. The Home Office then dealt with the vendors directly.
On 11 August, Brockwell Group Bexhill, purchased the property from the UAE for £6.3 million and on the same day, according to Companies House records, negotiated a very large loan from a mortgage broker.
The Home Office moved quickly and chose to dispense with established processes, including the requirement for a full business case before approving the purchase.
A full assessment of the remediation required on the site did not take place despite significant risks being flagged. The cost of the work was underestimated before contracts were exchanged, committing the Home Office to the purchase.
It was at this point the Home Office discovered the full extent of the land contamination and asbestos but was unable to back out. The remediation costs were estimated to be up to £3.6 million.
Brockwell Group Bexhill originally wanted £19.6 million for the site – which would have given them a profit of over £13 million within eight months, by March 2023, but settled for £14.5 million.
The Home Office also underestimated the time it would take between exchanging contracts and completing the purchase, leading it to pay the vendors an additional £0.9 million. As a result, it purchased a contaminated site for £15.4 million.
The site remained unused until the General Election last July when Labour took over. The previous government had thought about using it as a detention centre but Labour has paused any plans alongside dropping the Rwanda plan.
Sir Geoffrey Clifton-Brown MP, Chair of the Committee of Public Accounts, said: “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
MP Sir Geoffrey Clifton-Brown, Chair of the Committee of Public Accounts
He added: “The Public Accounts Committee has previously warned about the risks to taxpayer money when departments forego due diligence in making decisions at pace.
“My committee will be following up on this issue to ensure that continuous mistakes are not made and public money is not wasted in future acquisitions.”