Q1 Chairman: Good afternoon and welcome to the Committee of Public Accounts. Today we are looking at the Comptroller and Auditor General's report on The Cancellation of Bicester Accommodation Centre. We welcome back to our Committee Sir David Normington, who is Permanent Secretary at the Home Office. Perhaps you might introduce your colleague, Sir David?
Sir David Normington: Yes. I have Lin Homer with me, who is the Chief Executive of the Border and Immigration Agency.
Q2 Chairman: I welcome Tony Baldry, who has just arrived and is the constituency Member. We would not normally, Sir David, look at something that only affected one constituency, but I think that Sir John decided to look at this because it has wider implications. What I want to ask you about is why did you ever think, Sir David, that this project could provide value for money? If you read the report- and, if colleagues are interested, the particular references are in paragraphs 17 to 18 and 25 to 32- the benefits never outweighed the costs, did they, at any stage? The costs went up and down but never at any stage, looking at the cost-benefit analysis, did the benefits ever outweigh the costs; so why did you proceed with it?
Sir David Normington: It is true-it is on the face of the report and it is in the facts-that the nearest the quantifiable benefits got were within about £4 million a year over a ten-year period, just under £40 million in the business case; so the quantifiable case was a negative business case. However, it is often the case, particularly with innovative projects like this- and it was a bold project-that you have to look at the unquantifiable benefits. In most business cases of this sort, when you do not actually have anything to go on, you have a number of unquantifiable benefits to weigh in the balance. Those who were taking the decision weighed both of those things. The unquantifiable benefits were particularly about the impact on communities of not having asylum seekers dispersed into those communities but having them in one place in a centre. There was a lot of debate through this period about what those savings and benefits might be.
Q3 Chairman: So was the real reason just to have them in one place? Get them off the streets? That was the real reason, was it?
Sir David Normington: I do not think so. If you look at the report, it actually says that it thinks the benefits might be in the speed with which people can be processed; the efficiency of that processing; the likely deterrent effect of people being in one place and having a much more efficient system for processing people, because you knew where they were; plus the benefits of taking people out of communities where they would be a potential cost on education, on health and on other services.
Q4 Chairman: But we read in paragraph 24-and you might like to look at it, on page 15-"We found that the business case did not state the actual cost of asylum applications under existing arrangements, nor did it explain how the potential efficiencies would be derived". Surely this should have been taken into account, should it not?
Sir David Normington: I have gone back over a lot of these papers and this is absolutely true. At the time, and it is quite a long time ago, there was a belief that it was not possible to cost accurately enough how much it cost to handle an asylum applicant. Therefore, the business case was based on a broader set of estimates about the benefits, like an estimate of what the impact would be on the overall budget of dealing with people quickly; not having to house them for so long; being able to get them out of the country more quickly. However, it was not done against a baseline of: "This is the cost of handling an individual asylum applicant".
Q5 Chairman: Where did this idea come from?
Sir David Normington: I know that I am not allowed to say this, but I was not there. Reading back over the history, however, in 2001 the asylum system was under enormous pressure. The numbers of people applying for asylum with their dependants were touching 100,000. A new Home Secretary sat down with his officials and was looking for ways of releasing the pressures of that growing problem. There were models for this kind of centre in other countries.
Q6 Chairman: Well, hang on! I have just been briefed by the National Audit Office. What models? Where? We had difficulty in finding them. Apparently there is one in the Australian desert somewhere, which does not sound very pleasant. Tell us about the other models.
Sir David Normington: I have not been to see them but I believe that, certainly during the course of the policy development, a team of people went to three countries.
Q7 Chairman: Where? What countries?
Sir David Normington: Belgium, Sweden and Denmark. They looked at what I believe are-but I am afraid I am not an expert in this-
Q8 Chairman: Can you help us, Ms Homer?
Ms Homer: The Permanent Secretary is correct, Chairman. The people putting these proposals together did work with European colleagues, and there are models in those three countries that were mentioned where similar accommodation was being used. I am not suggesting that it was a direct copy, but certainly elements of that European learning was built in.
Q9 Chairman: "Elements." There is no direct copy of this anywhere, is there, to be honest?
Ms Homer: I think that it was fairly similar in some of its circumstances.
Q10 Chairman: Was the real reason, Sir David, that, politically, something had to be done? This was a way of convincing the public that the Government took the problem of asylum seekers seriously? There is nothing wrong with a minister saying: "Something must be done. There is real public concern" but, unfortunately, the costs always outweigh the benefits.
Sir David Normington: There was quite a serious crisis in 2000 and 2001 and, in that sense, there had to be an urgent response to it. This was not the only thing that was done. There was a White Paper at that time which set out the whole approach, of which this was one item. Of course, what happened after this- as we will no doubt get on to-was that the number of asylum seekers fell quite dramatically. This was the bit of the whole White Paper which did not work; but there was a very serious attempt from that moment to try to get a grip on the problem. I think that was indeed a legitimate thing to do at the time, because it was a matter of major concern, politically and publicly.