20 The Home Office's Group Investment Board asked the project team to amend the January 2004 business case to include wider benefits expected from accommodation centres, such as faster removal of unsuccessful applicants. This reflected the Department's aspiration that eventually most applicants would be dealt with through a network of accommodation centres of which Bicester would be the first. The reworked benefits realisation paper assumed a trial programme of two centres, with Bicester opening in late 2005 and RAF Newton in early 2006 and that benefits 'may be proportionally multiplied to cater for the four centre trial and indeed a possible full 12 centre programme'.16
21 Quantification was based on estimates by the Home Office and other government departments and agencies, including the Department of Health and the former Department for Education and Skills, using data drawn from various models relating to asylum. Two categories of benefit were identified:
■ Narrow quantifiable benefits - savings to be realised by Bicester, and generated for Government as a whole;
■ Broad benefits - benefits resulting from replacing the dispersed estate with an accommodation centre estate. This assumed ten accommodation centres would house and process asylum applicants but that some benefits could only be realised once the entire programme had been implemented.
22 The May 2004 benefits realisation exercise assumed six months slippage on Bicester, with the first benefits due in early 2006, rather than mid-2005, reflecting the planning delays. Savings from narrow benefits were estimated at around £24.1 million a year, split £15.9 million for central Home Office budgets, £6.4 million for the National Asylum Support Service and £0.5 million for the former Department of Education and Skills (at 2003 prices). Annual benefits were forecast to more than double by mid-2006 (see Figure 5). Of the £15.9 million benefit to central Home Office budgets, £2.5 million was expected from a reduction in asylum applications, £5.8 million from early cessation of support, a £0.05 million saving in transport arrangement costs, £4.76 million saving anticipated from more effective removals of unsuccessful applicants and a £1.78 million reduction in other staff costs. Not all estimates were true savings or efficiency gains in the sense of being 'cashable'. Some £2.7817 million of the £15.9 million benefit to central Home Office budgets, and some £4.7218 million of the £6 million to the National Asylum Support Service budget were 'substitution effects', freeing up monies invested in other budgets by the transfer of functions performed by them to Bicester. There were no absolute figures available, for example, for the removals benefit, which was based on a potentially unachievable assumption that all unsuccessful cases would be removed.
23 Broad benefits were estimated at £18.1 million a year for each centre, split £8.1 million for central Home Office budgets (see Figure 6), and £10 million for National Asylum Support Service. These benefits were quantified for a network of ten accommodation centres (column c of Figure 6), then divided by ten to give a notional benefit for each centre (column b). The £8.1 million benefits for the Home Office were then multiplied by an assumed probability that ten centres would be built which, at that time was estimated at 5019 per cent, as the accommodation centre project apparently had strong political backing, giving expected broad benefits for the Home Office of some £4 million. Whilst the algorithm used to calculate broad benefits is reasonable, the nature and timing of the benefits was probably unrealistic, given the other measures in hand at the time to speed up the end to end asylum process (see paragraph 2) and a steady decline in the number of applicants seeking asylum (see Figures 1 and 2). The accurate forecasting of asylum numbers is difficult, and the overall asylum position at the time was dynamic.
5 | Comparison of narrow benefits forecast in the January 2004 business case and May 2004 benefits realisation paper | ||
| 2005 benefits (half year) | 2006 benefits (full year)1 | |
January 2004 benefit | 5 | 10.8 | |
May 2004 benefit | - | 22.3 | |
Source: National Audit Office from Home Office data | |||
NOTES 1 2006 Quarter 4 figures are assumed to be the same as those for 2006 Quarter 3. 2 The May 2004 benefits realisation exercise reflects six months slippage, with the first benefits due in early 2006. | |||
24 We found that a key justification for the Bicester pilot accommodation centre project was that, operationally, the centre would provide a more economical and efficient means of processing asylum applications than existing systems. The Home Office classified these efficiencies as benefits and quantified them in monetary terms. 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 efficiences would be derived.
______________________________________________________________________________
16 During discussions with the Home Office about asylum accommodation centres, the Refugee Council expressed concern about the size of the proposed centres and proposed a smaller, community based model, known as the 'core and cluster model'. Initial thinking was that the 'core and cluster model' would require 12 centres, rather than ten. For planning purposes, the Home Office still assumed it would need ten centres.
17 £1.48 million for asylum casework staff and £1.3 million for appeals caseworkers.
18 £4 million reduction in the National Asylum Support Service budget for the base cost of supporting these asylum seekers in dispersed accommodation and £0.72 million for National Asylum Support Service staff.
19 The calculation was a weighted average of the whole scheme going ahead (50 per cent chance) and not going ahead (50 per cent chance).