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

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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.”

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Written by Concerned

August 3, 2005 at 10:57 am

Posted in Uncategorized

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