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.