An Australian travel firm has been given a two-year contract worth £1.6bn to handle the UK’s new asylum barges and accommodation, according to an investigation by a British newspaper.

It’s reported that, despite being criticised for poor handling of covid quarantine hotels, Corporate Travel Management (CTM) was quietly given the lucrative contract in February 2023, before the government revealed its plans to use giant floating barges to house migrants offshore.

According to the Independent, the CTM contract, published under the title “provision of bridging accommodation and travel services”, states that it has an estimated value of £1,593,535,200 over two years and could be extended beyond 2025.

The paper claims parts of official documents headed “pricing details” have been redacted in full because of “commercial interests”.

There have so far been three vessels announced under Rishi Sunak’s controversial asylum vessel plan. The Bibby Stockholm recently arrived in Portland, Dorset and will house 500 refugees. The location of the other two ships has not been confirmed.

“Sunak’s heartless and unworkable proposal to cram refugees, including survivors of torture, onto floating barges is cruel and inhumane,” said Ann Salter, clinical services manager at Freedom from Torture, shortly after the vessel’s arrival.

The Home Office says: “Under Part 6 of the Immigration and Asylum Act 1999, the Home Office has a legal obligation to support asylum seekers who would otherwise be destitute.

“In the Netherlands and Belgium, the authorities have delivered accommodation for asylum seekers on vessels in a safe and secure manner. Facilities onboard the vessel will be designed to provide for the essential needs of those accommodated in order to minimise the impact on local communities and local services. This includes the provision of basic healthcare, catering facilities and 24/7 security.”

Ministers have previously refused to detail the projected cost of the government’s controversial asylum vessels. The government has, so far, maintained that housing migrants on barges will ultimately be cheaper than using hotels, which cost an estimated £6m a day.

Richard Drax, the Conservative MP for South Dorset, told the Independent that the public “should know how much is being paid” on the barge set-up and said the spending he was aware of so far was “alarmingly high”.

“The point is this is taxpayers’ money. This contract might actually be separate to what the ports are being paid,” he says. “Then on top of that, the police want money, the health authority wants money, of course the council wants money, and yet the government continues to insist that this is cheaper than hotels. The overall figure will be alarmingly high.”

Yvette Cooper, Labour’s shadow home secretary, told the newspaper that the Home Office has “serious questions to answer”.

She adds: “This is an incredibly expensive contract with no clarity on whether proper procedures have been followed, and the barges come on top of costly hotels, not instead of them, because of the government failure to take asylum decisions or get any grip.”

CTM describes itself as “a global provider of innovative and cost-effective travel solutions spanning corporate, events, leisure, loyalty and wholesale travel”.

In May 2023, immigration minister Robert Jenrick said Bibby Stockholm would be managed “by a specialist and experienced provider, which has a strong track record of providing this kind of accommodation”. He added that the provider had “managed two vessels [housing Ukrainian refugees] in Scottish ports for the past year”.

It is understood that the government placed the new barges within the scope of an already-existing agreement with CTM for “travel and venue solutions”. This agreement was intended to cover official bookings for conferences, flights, train tickets, hotels and vehicle hire for ministers and civil servants.

Speaking to the Independent, a source accused the government of “pushing the scope beyond what it was intended to be used for”.

A Home Office spokesperson says: “The pressure on the asylum system has continued to grow and requires us to look at a range of accommodation options, which offer better value for money for taxpayers than hotels. It is right that we explore all available options.

“CTM was awarded the contract to deliver accommodation for the Home Office after an extensive procurement process and has a strong track record of providing this kind of accommodation.

“We are pleased that they will be providing management for Bibby Stockholm, the two additional vessels announced by the prime minister, as well as bridging accommodation and travel services.”

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