The Home Office spent £15 million buying a derelict prison contaminated with asbestos amid political pressure to stop housing migrants in hotels, according to Whitehall’s spending watchdog.
The Government department cut corners and paid more than it needed to in its haste to acquire the Northeye site in Bexhill-on-Sea, East Sussex, but this was “ultimately deemed unfit for its intended purpose due to contamination”, the National Audit Office (NAO) said.
A report published on Friday shows the site was bought for around £6.3 million by vendors Brockwell Group Bexhill Limited Liability Partnership in August 2022.
But the Home Office completed the sale in September 2023 for around £15.4 million – more than double what had been paid for the site 12 months earlier.
Campaigners said millions of pounds of public money was “thrown away on a contaminated and dangerous site that should never have been under consideration” as they branded the revelations a “fiasco”.
The chairman of a Commons committee that scrutinises government spending criticised the Home Office for “rushed and misjudged” decision-making, which resulted in “overpaying” for a site that was “not fit for purpose” and said MPs would make sure taxpayers’ cash was not “wasted in future acquisitions”.
The sale came after then-prime minister Rishi Sunak vowed on December 13 2022 to stop housing asylum seekers in hotels and find accommodation in disused holiday parks, former student halls and surplus military sites instead, telling the Commons, “unless we act now, and decisively, this will only get worse”.
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
The statement in Parliament “generated significant pressure within the Home Office to identify and secure sites for asylum accommodation at pace”, the report said.
That same month, the Home Office “decided to acquire the Northeye site through purchasing it from the vendors rather than lease the site” as initially planned, the NAO found.
By January 16 2023, the Home Office had instructed property advisers to make an offer to the Northeye site vendors based on completion within six weeks.
The site was one of four “acquired by the Home Office under the direction of the small ministerial group” and by January 19 2023, the group agreed to prioritise the Northeye site, according to the report.
This case exemplifies the need to adhere to minimum standards and not forgo due diligence, especially at times of intense pressure
The NAO said the group, set up in November 2022, was made up of “ministers and officials from across Whitehall, including the minister for immigration, and was chaired by the Chancellor of the Duchy of Lancaster”.
These positions were at the time held by Robert Jenrick – now the shadow justice secretary after his failed bid to become Tory leader – and Oliver Dowden, who was later appointed deputy prime minister.
In February 2023, planning checks revealed “high-risk” contamination across the site and a further review concluded the “primary contamination risk was from asbestos-containing materials in existing buildings and contaminated ground”.
A “due diligence report” also indicated repairs to buildings could cost “in excess of £20 million” but this was not mentioned in the Home Office’s internal advice, the NAO said.
Mr Jenrick announced on March 29 2023 that his government would develop the Northeye site to house 1,200 migrants, with the Home Office completing the sale for around £15.4 million on September 21 2023.
The group of ministers “dispensed with the need for a full business case before approving the acquisition”, according to the NAO’s findings.
The watchdog’s report concluded: “The Home Office’s attempt to acquire the Northeye site 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 that original purpose and it paying more for it than it needed to.”
In July this year, the Home Office said no decision had been made on the use of the site and it would “consider its strategy and broader requirements before taking a view on the future use of it”.
While the site “may yet fulfil a need the Home Office has, it remains to be seen whether the acquisition of the Northeye site results in benefits that justify its cost”, the NAO added.
Sir Geoffrey Clifton-Brown, chairman of the Commons Public Accounts Committee, 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.
“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.”
Lou Calvey, director of charity Asylum Matters, which campaigns for migrants to be housed in communities instead of camps, said more than £15 million of public money was “thrown away on a contaminated and dangerous site that should never have been under consideration”.
She accused the previous government of “ignoring warnings so it could indulge in waste and carelessness, putting cruel ideology above everything else – including value for the taxpayer”.
“If more proof were needed of how ill-thought-out the policy of camps in our asylum system is, this is it”, she said, adding: “Our new Government must take the lesson from this fiasco, and immediately abandon plans to place people seeking safety in any large scale site like this.”
The NAO report said: “It is encouraging that the Home Office has taken steps to understand what went wrong and that it has made changes to improve… But this case exemplifies the need to adhere to minimum standards and not forgo due diligence, especially at times of intense pressure.”
The Home Office noted the report was about the actions of the previous government and 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 are getting the asylum system moving again, increasing returns of people who have no right to be here, with over 9,000 people removed since July 2024. We will continue to restore order to the system so that it operates swiftly, firmly and fairly.”
Labour said the report raises “serious questions” about opposition leader Kemi Badenoch’s judgment in appointing Mr Jenrick as shadow justice secretary.
“The Tories spent 14 years wasting taxpayers’ cash to leave Britain with a £22 billion black hole. Now the National Audit Office has revealed the extent of the Conservatives’ reckless spending,” a party spokesman said.
“It raises serious questions about Kemi Badenoch’s judgement to appoint someone to her shadow cabinet who has no regard for public money.
“It’s the same old Tories, they haven’t learned anything. Labour is fixing the foundations to deliver change, and clean up the mess the Tories left.”
The Conservative Party has been contacted for comment.
