Asylum firm faces probe

THE JOURNAL (Newcastle, UK)

Investigations have been launched into allegations of financial irregularities by a firm providing accommodation for asylum seekers in the North. The Home Office and Newcastle Council have begun probes into the Angel Group. The company has been hit with allegations it claimed council tax relief on properties which it was not entitled to. And it is said to have received payments from the national asylum support service for properties in Newcastle which were found to be uninhabitable. Angel Group owner Julia Davey said: “The allegations are rubbish and the invention of ex-employees who have an axe to grind.” The Home Office has asked its audit and assurance unit to look into the claims. A spokeswoman said: “We take these allegations very seriously. We are currently investigating the claims made to us. “If the allegations were substantiated, the contract would be terminated.” Newcastle Council said: “We are aware of serious allegations that have been made.”

Firm accused over asylum seeker homes

Double-letting claim rubbish – says company

Yorkshire Post

William Green

Political Correspondent

A PROBE into an asylum seeker housing contract has been launched amid claims a private company charged the Government and a Yorkshire council for the same properties. The Home Office is investigating if London-based Angel Group rented the same houses to Leeds Council to put up homeless people and to the Government to accommodate asylum seekers for seven months last year. The company has a contract with the Home Office’s National Asylum Support Service (NASS) to provide 3,351 bed spaces, which equates to 5.78 per cent of the entire scheme. It provides accommodation in Yorkshire and the North-East, and separately has a deal with Leeds Council to house the homeless. Allegations have also emerged as to whether the firm was paid for accommodation unfit for habitation or for which it had no keys in Newcastle and whether it claimed discounts on council tax to which it was not entitled in the city and Leeds. The Home Office yesterday confirmed a probe was under way, and added the contract could be terminated and the police involved if evidence of fraud was substantiated. “We are taking these allegations very seriously and we are currently investigating the claims made to us and the Angel Group,” said a spokeswoman. Leeds Council said it had a contract with Angel Group to provide 220 units for the homeless, which were a mixture of flats and houses for single people and families. But the council stressed it was only charged for what units it used under the deal, which began last June. It said it was unable to provide information about council tax because of the Data Protection Act. “Unlike the Home Office, Leeds City Council reviews properties every month with the Angel Group. We would expect Government auditors would take the necessary action if it’s proved that double-letting has been taking place in order to protect the taxpayer,” added a spokesman. Angel Group managing director Julia Davey said the allegations were “absolute rubbish” and the invention of former employees with an axe to grind after losing their jobs. In a statement issued through her solicitor, she said: “During the entire course of the NASS contract we have been subjected to many hundreds of NASS inspections (of which, in accordance with Home Office procedures, we have had no prior notice) and we have received a satisfactory report in every single case. “Our records have also been audited by Home Office-appointed accountants, who have always given us a clean bill of health. “I would never ask anybody to lie and these allegations represent a gross slur on the many tried and trusted employees Page 43 Firm accused over asylum seeker homes Yorkshire Post August 4, 2005 who continue to work for Angel”. The investigation comes after the Government spending watchdog last month warned the Home Office was paying millions of pounds over the odds to house asylum seekers. The National Audit Office (NAO) said contracts signed to accommodate asylum seekers were costing at least £25m more than market rates and concluded there was “considerable scope” for savings. The auditors urged NASS to “build up an awareness of typical regional prices so that it can negotiate competitive rates”. The report also revealed that many landlords were receiving taxpayers’ money for unoccupied properties because contracts signed by the Government were so inflexible. In all, £439m was spent by NASS to house asylum seekers in 2003-4, the NAO report said.

william.green@ypn.co.uk

Probe into flats group

EVENING CHRONICLE (Newcastle, UK)

A property firm is being investigated after claims of financial irregularities with contracts for housing asylum seekers in the North East. The allegations have been made against London-based Angel Group, which has properties in Newcastle. Page 41 Asylum firm faces probe THE JOURNAL (Newcastle, UK) August 5, 2005, Friday The firm earns millions annually through Government contracts for housing asylum seekers around the country. It has had contracts with the National Asylum Support Service [NASS] for five years, mainly in Yorkshire and the North East. The allegations, made in a national newspaper, allege Angel received cash from NASS for homes in Newcastle later found to be uninhabitable or for which it had no keys. It is alleged Angel claimed discounts on council tax to which it was not entitled in Newcastle and Leeds. Lawyers for the company and the owner have denied the allegations. Newcastle Council has launched an inquiry into the claims. A council spokesman said: “The Angel Group has a number of properties in Newcastle. “We are aware of the serious allegations made and are investigating the discounts claimed by the Angel Group and any further entitlement they may have.” Sir Jeremy Beecham, councillor for Benwell , has asked the council’s chief executive for an investigation. Sir Jeremy said: “The reports raise serious questions about financial matters, including council tax relief, as well as about the quality of homes for people in need.” A Home Office spokesman said: “We take these allegations very seriously. We are investigating claims made about the Angel Group and have commissioned the Audit and Assurance Unit, an independent body, to look into it. If we discover any evidence of wrongdoing we will refer the matter to the appropriate authorities, including the police if fraud is suspected.” The Angel Group had made an agreement with the NASS to provide 3,351 bed spaces nationwide. The allegations relate to a time before new contracts negotiations started. Julia Davey, Angel Group owner, said: “The allegations are rubbish and the invention of ex-employees who have an axe to grind with us. “During the NASS contract we have been subjected to hundreds of inspections, of which, in accordance with Home Office procedures, we have had no prior notice. We have received a satisfactory report in every single case.”

Special investigation: Rich pickings in the world of asylum seekers: Company made millions through Home Office housing scheme

BYLINE: Owen Bowcott and David Pallister

SECTION: Guardian Home Pages, Pg. 4

It has taken Julia Davey only five years to build up her multimillion- pound property empire. From small beginnings in 1999 – housing single asylum seekers for Kent county council – the assets of the Angel Group at the end of 2003 had, according to the last company report, expanded to nearly £40m. In that time Ms Davey, 48, has formed 57 other companies. On top of big dividend payments, she awards herself a salary of around £1/2 m. She is the sole director. That is the sort of basic pay expected by the head of one of Britain’s top plcs. The accolades have followed, as well as the rewards, including a Range Rover Vogue, a red Ferrari, a new three-storey headquarters in London’s Docklands and business interests in the US, Israel, Poland and Cyprus Last year the Estates Gazette’s rich list placed her at number 15 out of the 20 wealthiest women in property. In June an online business website – realbusiness.co.uk – put her at number 17 in its list of 50 top businesswomen. How was it all possible? Housing for asylum seekers and the homeless is the Angel Group’s stock in trade. “Providing Homes & Hope for the Future” is Angel’s motto and it boasts that it is a provider of “high quality accommodation and support services to vulnerable people across the United Kingdom”. The Home Office contracts have been enormously lucrative for the private landlords. However, internal company records and conversations with former employees reveal that the Angel Group may have indulged in sharp practices that could have deprived the British taxpayer of tens of thousands of pounds. They appear to include double booking of houses to Leeds city council and the Home Office’s national asylum support service (Nass), accepting payments from Nass for properties which were unfit or where keys had not been obtained and wrongly claiming council tax relief. The Guardian has identified 35 examples. Ms Davey, through her lawyers Carter-Ruck, has denied any fraudulent practices. She says all the examples provided were “small-scale administrative errors” and the money has been paid back. She accuses our sources of being malicious and resentful after being sacked. The Angel Group, along with a handful of other private companies, principally benefited from the government’s decision in 1999 to disperse asylum seekers out of the crowded south-east to the rest of the country. Asylum, then as now, was a hot political issue. With applications rising, and amid a huge backlog of cases and seething local resentments, particularly in the coastal towns of Kent, the Home Office set up Nass in 2000 to support asylum seekers while their claims and appeals were being considered. Nass began spending about £1bn a year. Last year it spent £439m on accommodation alone, £25m above the market rates, according to a survey by the National Audit Office (NAO) this month. Angel got off to a flying start. Three months before Nass was established in April, Ms Daley bought an old nurses’ Page 47 Special investigation: Rich pickings in the world of asylum seekers: Company made millions through Home Office housing scheme The Guardian (London) – Final Edition August 3, 2005 home in Newcastle and called it Angel Heights. Its first occupants, under an interim scheme where local authorities agreed to transfers, were Iraqi and Iranian asylum seekers from Kent, who within weeks had rioted over poor conditions. In its first two years Angel Heights generated a profit before tax of £700,000 and Ms Davey picked up a dividend of £300,000. With a five-year contract from Nass that amounted to £20m a year, the Angel Group started acquiring and renting properties across Yorkshire and the north-east. It was handling up to 800 properties at a time, all of which were paid for by Nass whether they were occupied or not. In the event, according to former employees, between 30% and 50% were not used. At its busiest, the Angel Group was providing more than 3,600 bed spaces to Nass. The fee paid for each bed space was £102 a week. In its first three years Nass was an organisational catastrophe. A 2003 independent review found a “continuous crisis management” and a “worrying lack of financial discipline”. As a result, delivery was “difficult, slow, expensive and prone to errors”. On the critical question of procurement, the review found a shortage of professional managers and described the accommodation contracts as “rigid and mechanistic” and expensive to manage. A staggering 50% of records on spaces available were inaccurate. Only in April this year, was the practice of paying out money for unused properties on the Nass register abandoned. In the initial rush to meet the contract requirements Angel started to tell Nass they had rented properties available before they had signed contracts with the landlords or taken possession of the keys, and on inspection some were uninhabitable. This practice accelerated in October 2004 when Nass cancelled large contracts with two other private companies and asked Angel to supply more homes. Staff at Angel felt under pressure to enter properties on the Nass register as quickly as possible. “We called (those) we couldn’t use ‘ghost properties’,” a former employee explained. “I had to help . . . putting bogus properties on the Nass system. We would get hold of the details at the first possible moment . . . before the keys were in our possession. “There were hundreds of those where we never got the rights to them. Often they were ones where the landlord (later) decided he wasn’t happy with the rent or (hadn’t) realised there would be asylum seekers. There were properties where the environmental health were getting on our backs and said they would put out enforcement orders.” Another former employee involved in the process at Angel Group recalled a similar experience. “We were put in a situation where we had to lie all the time for the benefit of the company,” he said. “It was very stressful. We were saying (to Nass) you can’t use this property because there’s maintenance going on or a series of excuses. We had to meet targets.” The situation was often chaotic. In Newcastle, for example, there were three houses which Angel put on the Nass register despite staff having difficulties in obtaining keys. The landlord who owns them has told the Guardian he received no rent for the properties from Angel. “The keys never materialised. Because these properties had been submitted to the Home Office, we could not just take them off if we did not have replacements,” explained a third Angel ex-employee. “All the properties were being paid for by the Home Office at taxpayers’ expense.” Special investigation: Rich pickings in the world of asylum seekers: Company made millions through Home Office housing scheme The Guardian (London) – Final Edition August 3, 2005 “My colleagues in Newcastle and I did suggest that because we had not paid any rent for these properties, that we use some of the monies to carry out any necessary work . . . I was appalled that authority was not given because I had received information from Newcastle that there were properties where heating was not working and families and children were suffering from the cold.” In February this year the employee emailed Angel’s former company secretary, saying he had managed to find 12 replacement properties in Newcastle for those found to be defective. He said he would draw up tenancy agreements if they were found to be fit to live in. A few minutes later the secretary emailed back: “I do not want this process to take time. I and Julia were surprised/ shocked it had not already happened some time ago. It must be completed without fail by the end of the day so (a named member of staff) can replace the properties on the Nass database before she leaves tonight.” Angel insisted the properties were taken off the Nass register when “defects” were found. The company said it had paid back the Home Office and denied any of its actions had been corrupt. In 2004 Angel Group won a contract with Leeds council to provide 250 units for the homeless. But some of those people were placed in houses that Nass was already paying for. Another former Angel employee said that when the Leeds city contract came up last year there was a desperate rush to fill the required number of bedspaces. “It was Julia’s idea to raid the Nass register,” he explained. “She told us to get as many Nass properties as we could. I reckoned that if one of the Nass properties had, say, only one asylum seeker in them we could get them out and offer them to Leeds. Julia would scream and shout: ‘I don’t care how many people are in them, just get the properties’.” While Ms Davey’s lawyers dismissed these allegations as “absolute rubbish”, they admitted that mistakes were made in the double-booking of the three properties identified by the Guardian. But the company said these were administrative errors and credit notes had been issued. The Guardian visited these properties, all on bleak housing estates. In one, a young homeless woman, said: “It was filthy. My partner took one look at it and wanted to leave. It took me two days to clean all the grease off the cooker.” In another, with a pile of rubble outside, was a 26-year-old pregnant asylum seeker from the Democratic Republic of the Congo. The front room carpet was covered in dark stains. “How am I to bring a child into this place,” she said. “They won’t even give me a washing machine.” The NAO this month released a report showing that deficiencies in the Nass system still exist. Reviewing Nass data for the last four months of 2004 the NAO found that 33% of 4,535 properties inspected had “significant” defects and 7% needed immediate action. Although one provider had its contract ended last year because of poor performance, the NAO said: “None of the other accommodation providers incurred any direct financial penalties for providing unsuitable housing stock.”

Special investigation: Inquiry into firm’s asylum contracts: Inquiry into firm’s contracts

The Guardian (London) – Final Edition

BYLINE: David Pallister and Owen Bowcott

The Home Office is investigating allegations of financial irregularities by a private property company which earns millions of pounds annually through government contracts for housing asylum seekers around the country. The investigation, prompted by inquiries by the Guardian, focuses on claims that the London-based Angel Group charged the Home Office and Leeds city council for the same properties. Company records, internal emails and testimony from former Angel employees also suggest the company was paid for accommodation that was unfit for habitation or for which it had no keys. Records further suggest Angel claimed discounts on council tax to which it was not entitled in Leeds and Newcastle upon Tyne. The Home Office has notified the Angel Group that it has been released from its obligation not to comment about the contracts with the department’s national asylum support service (Nass). Page 44 Firm accused over asylum seeker homes Yorkshire Post August 4, 2005 The Guardian put 35 examples of alleged irregularities to Angel’s lawyers, Carter-Ruck, who acknowledged the mistakes but described them as “administrative” and “small clerical errors”. Carter-Ruck insisted the mistakes were “wholly innocent” rather than deliberately fraudulent. Carter-Ruck said the mistakes had been detected by the company’s own audit and inspection systems and that the Home Office had been repaid in full. The company refused to say when these credits were made. However, the Home Office has told the Guardian that the credit notes for nine of the properties cited were paid on June 10 – three weeks after the Guardian alerted the various authorities to its inquiries about specific addresses. It is understood the company paid back around £50,000. Leeds city council confirmed it was obliged to inform Angel of our inquiries after they were made on May 18. The Home Office said its investigation began after the Guardian’s approaches on May 20. The Home Office said: “We take these allegations very seriously.” It said it had commissioned the department’s accounts and audit unit to investigate. “If we discover evidence of wrongdoing we will refer the matter to the appropriate authorities including the police, if fraud is suspected.” Based in Docklands in London, Angel has had contracts with Nass for five years, mainly in Yorkshire and the north-east. Income from its houses, flats and hostels largely contributes to a turnover of around £20m a year. It was awarded a new contract in May for up to 15 months. The group, with more than 50 subsidiaries, is 100% owned by 48-year-old Julia Davey. In 2003 she paid herself a salary of £458,000 as well as collecting nearly £1m in dividends. The allegations are that: *For seven months last year Angel Group double-booked properties by renting out the same houses to both Leeds city council for the homeless and Nass *The company claimed council tax relief on the basis that properties were unoccupied – even though they were available on the Nass register and technically available for asylum seekers *Angel received payments from Nass for properties in Newcastle which it later found to be uninhabitable or for which it had no keys. Angel staff referred to these as “ghost properties”. A senior former employee of Angel, who worked there for several years, said: “We put lots of ghost properties on the Nass register right at the very beginning. Julia insisted, even though they weren’t ready. It was all about the money.” One of the former employees says that a verbal agreement was reached with a Newcastle landlord to take over about 50 properties he owned. “Most of the properties were submitted to Nass the very same day, something which I and other colleagues had strongly advised against because not one of these properties had been viewed. “After a few weeks our staff in Newcastle were discovering a number of the properties to have major defects. In addition, we had still not received the keys for some of them.” In a statement issued through her lawyers this week, Ms Davey denied engaging in any deliberate fraudulent practices. She said: “These allegations are absolute rubbish and the invention of former employees who, having lost their jobs, have an axe to grind as far as the Angel Group is concerned. “During the entire course of the Nass contract we have been subjected to many hundreds of Nass inspections (of which,  in accordance with Home Office procedures, we have had no prior notice) and we have received a satisfactory report in every single case. “Our records have also been audited by Home Office-appointed accountants who have always given us a clean bill of health. “I would never ask anybody to lie and these allegations represent a gross slur on the many tried and trusted employees who continue to work for Angel. I am surprised that the Guardian should have been taken in by such malicious nonsense.” Ms Davey set up Angel Group in 1999 when the government, besieged by criticism of its asylum policies, established a scheme to disperse asylum seekers out of the crowded south-east to northern towns and villages. Nass, which has an annual budget of £1.5bn, started in April 2000. The Angel Group was one of a dozen private companies contracted to supply properties. By the end of 2001, according to the first company records, it made a pre-tax profit of £4.8m. After three years of operations, Nass admitted it had had a chaotic start with a lack of financial discipline and management control. The Angel Group is currently contracted to provide around 3,000 bed spaces, roughly 6% of all Nass lettings. Leeds city council, which confirmed it had rented three properties Angel had placed on the Nass register, said: “Unlike the Home Office, LCC reviews properties every month with the Angel Group. We would expect government auditors would take the necessary action if it’s proved that double-letting has been taking place in order to protect the taxpayer.” Responding to allegations about 11 “ghost properties” in Newcastle, the company said these had been taken over from another landlord in October 2004 and were removed from the Nass register when “defects” were discovered. It denied acting in a corrupt manner. Company records show this process, in some cases, took four months. Of the 21 properties on which council tax discounts were claimed, the company said the value of such “mistakenly claimed relief” represented “the merest fraction” when compared with the total council tax relief it was entitled to but had not claimed. It said a recent audit in Newcastle showed about £6,000 worth of council tax relief had not been claimed.