G4S Criticized With Serco for Poor Asylum Housing in U.K. Report

G4S Plc (GFS) and Serco Group Plc (SRP) are providing “squalid” and “run-down” housing to asylum seekers under government contracts, according to a report from a U.K. parliamentary panel.

The Home Affairs Committee is concerned by the sub-standard level of housing provided to asylum applicants under the six contracts it holds with G4S, Serco and Clearel Ltd., according to its report published today.

“We were alarmed to discover that thousands appear to be living in squalid run-down housing” as part of the contracts, Keith Vaz, chairman of the committee, said in a report. “These companies must be held accountable and deliver a satisfactory level of service.”

The companies have provided accommodation, associated services and transportation to asylum applicants and their families since last year under six so-called “Compass” contracts with the U.K. government. Previously U.K. asylum accommodation was operated under 30 separate government contracts.

The panel called for the Home Office to publish the results of its random inspections of asylum seeker properties to allow the public to monitor the effectiveness of the housing providers.

Justice Investigations

G4S and Serco are already facing difficulties in their home market after the Justice Ministry announced an investigation of whether they overcharged for the electronic tagging of prisoners.

Serco, based in Hook, England, generated more than half of its revenue from the U.K. in 2012, while Crawley, England-based G4S generated just under a quarter from the U.K. and Ireland. Clearel is a joint venture between private service providers Clearsprings Group and Reliance Security Task Management.

G4S provides housing and services for more than 10,000 asylum seekers under the contract and its key focus in the first year of the contract was to “improve the quality of the accommodation” inherited from previous providers, the company said in an e-mailed statement.

Serco has received a “low level of formal complaints about accommodation standards” and all of its properties are subject to month inspections and random home office checks, the company said in an e-mail. The company also said it has “worked hard to improve the properties we inherited at the start” of the contract.

G4S was criticized by the U.K. prison inspector earlier this week for “very concerning” conditions at a new training jail the company operates near Wolverhampton.

To contact the reporter on this story: Natasha Doff in London at ndoff@bloomberg.net

To contact the editor responsible for this story: David Risser at drisser@bloomberg.net

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