An Australian travel firm previously slammed for its handling of Covid quarantine hotels has been quietly handed a £1.6bn contract covering the UK’s new asylum accommodation ships, The Independent can reveal.
Corporate Travel Management (CTM) was put in charge of the lucrative two-year arrangement in February, weeks before the government revealed it would use a barge as its first offshore accommodation for asylum seekers.
The contract was awarded directly to CTM without competition, and a lawyer with knowledge of the system said the government had pushed a wider deal originally drawn up for official travel “beyond what it was intended to be used for”.
Ministers have repeatedly refused to detail the projected cost of Rishi Sunak’s controversial asylum vessels, while insisting they will be cheaper than using hotels that are currently costing £6m a day.
This week, Suella Braverman told parliament’s Home Affairs Committee she could not predict the cost of the new Illegal Migration Bill, because there are “many unknown factors”.
Three vessels so far have been announced, with a barge named the “Bibby Stockholm” due to arrive in Portland, Dorset later this month and a further two ships set for undisclosed locations.
Richard Drax, the Conservative MP for South Dorset, said the public “should know how much is being paid” on the barge set-up and said the spending he was aware of so far was “alarmingly high”.
“The point is this is taxpayers' money,” he told The Independent. “This contract might actually be separate to what the ports are being paid.
“Then on top of that, the police want money, the health authority wants money, of course the council wants money, and yet the government continues to insist that this is cheaper than hotels. The overall figure will be alarmingly high.”
Yvette Cooper, Labour’s shadow home secretary, said the Home Office has “serious questions to answer”.
“The Tories are spending more and more taxpayers’ money on their total failure to fix the asylum backlog they have created,” she added.
“This is an incredibly expensive contract with no clarity on whether proper procedures have been followed, and the barges come on top of costly hotels, not instead of them, because of the government failure to take asylum decisions or get any grip.”
The CTM contract, published under the title “provision of bridging accommodation and travel services”, states that it has an estimated value of £1,593,535,200 over two years and could be extended beyond 2025.
The Home Office refused to answer The Independent’s questions on what portion of the contract covers barges, and parts of official documents headed “pricing details” have been redacted in full because of “commercial interests”.
John O'Connell, chief executive of the Taxpayers' Alliance, said: “This murky contract leaves taxpayers in the dark. The migrant crisis may require an urgent response, but bungled procurement has cost a fortune in recent years.
“Ministers must ensure transparency and value for money when tendering services.”
Answering a parliamentary question on the Bibby Stockholm in May, immigration minister Robert Jenrick said it would be managed “by a specialist and experienced provider, which has a strong track record of providing this kind of accommodation”. He added that the provider had “managed two vessels [housing Ukrainian refugees] in Scottish ports for the past year”.
On its website, CTM describes itself as “a global provider of innovative and cost-effective travel solutions spanning corporate, events, leisure, loyalty and wholesale travel”.
The firm says it was established in Brisbane in 1994 and has since grown from a “two-person start-up into one of the world’s most successful travel management companies”, operating across Australasia, Asia, the Americas, Europe, the Middle East and Africa. It has two UK offices in London and Manchester.
The firm’s most recent financial report hailed record profits, having taken A$292m (£160m) in revenue over the last six months of 2022.
A notice to its shareholders celebrated the new contract’s “significant impact” on financial growth, adding: “This work involves highly complex services and logistic support… CTM has both the experience and specialised knowledge to support this work.”
The government placed the new barges under a pre-existing agreement with CTM for “travel and venue solutions”, which previously covered official bookings for conferences, flights, train tickets, hotels and vehicle hire for ministers and civil servants.
A source familiar with the drawing up of the overarching framework accused the government of “pushing the scope beyond what it was intended to be used for”.
“If products and services are outside scope there’s a procurement failure and the contract has been awarded without following the rules,” they told The Independent. “It doesn’t look like the right vehicle for this kind of contract and it looks like they’ve done it to minimise visibility.”
The remit of CTM’s government work was widened during the pandemic and its general manager for northern England, Michael Healy, was made an OBE in the 2021 New Year honours list over the repatriation of British nationals stranded abroad during the Covid pandemic.
A report by parliament’s Foreign Affairs Committee found that the operation was “too slow and placed too much reliance on commercial providers”, but CTM was then handed a contract for operating quarantine hotels and mandatory testing.
In a series of angry Google reviews that dragged the company’s rating down to 1.4 stars, one person called CTM “incompetent”, while another wrote: “Shame on the Tory government UK, on whoever decided to give them this contract.”
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Show all 50Several MPs raised their constituents’ poor experiences in parliament, with one presenting a formal petition demanding compensation and saying the way the contract was awarded “avoided due process or competition”.
CTM was later involved in operations to transport Afghans and Ukrainians to the UK, and operated two cruise ships used to temporarily house Ukrainian refugees in Scotland.
That contract, which was also awarded without competition under the same framework as the new barges, covered two ships and hotels, and had an estimated value of £100m.
CTM declined to comment and did not answer The Independent's request for details of what the contract covered.
A Home Office spokesperson said: “The pressure on the asylum system has continued to grow and requires us to look at a range of accommodation options, which offer better value for money for taxpayers than hotels. It is right that we explore all available options.
“CTM was awarded the contract to deliver accommodation for the Home Office after an extensive procurement process and has a strong track record of providing this kind of accommodation.
“We are pleased that they will be providing management for Bibby Stockholm, the two additional vessels announced by the prime minister, as well as bridging accommodation and travel services.”
