Question 109 (Mr Richard Bacon) on the extent to which the Accounting Officer briefed Ministers on the consequences of the negative net present value of the proposed Accommodation Centre at Bicester.

1.  Following the Group Investment Board's consideration of the Business Case for Bicester in February 2004, the GIB requested further work be undertaken to analyse the benefits. The results of this re-appraisal were presented to Ministers through a submission to the Home Secretary from the Project Sponsor on 26 May 2004. This submission outlined the costs and benefits of the Bicester project, and was routed to the Home Secretary via the Accounting Officer.

2.  The submission detailed the benefits assessed for Bicester, and was clear that "if only the most narrow and easily quantifiable benefits are accounted for, Bicester does not constitute value for money". It stated that as a consequence, broad benefits amounting to some £4 million per annum were required to achieve value for money. These were expected to accrue as accommodation centres increasingly formed part of a developing end-to-end asylum system. They derived principally from the overhead savings which could be realised if further centres were rolled out to deal with a significant proportion of applicants; ie they were not benefits which would derive immediately from Bicester but additional benefits which could be expected to accrue later if Bicester became the first of a network of centres. In addition, it was considered reasonable to assume that non-quantifiable benefits would prove to have a significant impact. These were the anticipated improvements in social cohesion which were expected to accrue from relieving pressures on urban dispersal areas, including reductions in crime.