A new contract

34. In August 2019, the Home Office invited outsourcing companies to bid for a contract worth up to £260 million over 10 years from May 2020 to manage Brook House and Tinsley House.¹ G4S did not bid for the contract.
35. In February 2020, Serco was awarded the contract to run the Gatwick IRCs and pre-departure accommodation, following a competitive public procurement process.²
36. The Home Office stated that improvements were made in the Serco contract, including: a new staffing model with more staff supporting detained people; a two-hour reduction in the time detained people were locked in their rooms overnight; more welfare staff; more systematic assessments; educational and recreational activities seven days a week; increased assurance; a clearer and firmer approach to sanctions for poor performance; and requirements for the reduction of violence, substance misuse and drug supply. It stated:

“Overall, the new contract has been designed to have a much greater focus on the safety and welfare of those detained.”³

37. Mr Riley told the Inquiry that the contract with Serco was not drafted specifically to address concerns arising from the Panorama programme or detailed in Mr Shaw’s reviews. He highlighted “the overall focus on detainee welfare” within the new contract and the reduced number of KPIs that were “more clearly focused on outcomes”.⁴ He also noted KPIs relating to staff misconduct, “maintaining a healthy staff culture”, and failure to report serious incidents.⁵ The Inquiry was told that the new contract links KPI failures with profit reduction and that, unlike the G4S agreement, repeated failures could lead to the termination of the contract.⁶ Two “critical” failures attract a fixed penalty of £50,000: the escape of a detained person and self-harm resulting in death involving “any failure to follow laid down procedures”.⁷ Other failures give rise to payments calculated by reference to the anticipated average monthly profit margin, depending on the level of failure, ranging from 5 per cent for “severe” to 0.25 per cent for “minor”.⁸
38. As with the G4S contract, a KPI failure may not give rise to a financial penalty if it is ‘mitigated’. Mr Steven Hewer, the current Director of Gatwick IRCs under Serco, explained that mitigation would require either that there were extraordinary situations outside Serco’s control that had a significant impact on the ability to deliver the contract, or that Serco had introduced new systems or processes to stop the failure from happening again.⁹
39. Between May and August 2020 – the initial period of Serco’s management of Brook House – there was a “relief period” on all KPIs, meaning that no penalties would be applied for failure to comply.¹⁰ From July 2021, and continuing at the time when Mr Hewer gave evidence, a “derogation” had also been agreed with the Home Office in respect of multiple KPIs, by which any failure to comply would be reported but would not result in a penalty. This was because Serco had been asked by the Home Office to provide staff to immigration asylum hotels near Gatwick, as a result of which Serco could not meet certain requirements of the Gatwick IRCs contract.¹¹ Mr Hewer called this a “temporary arrangement” that had “gone on a bit longer than anticipated, from a Home Office perspective”.¹² The KPIs subject to this derogation related to staffing levels, recruitment processes, adherence to the staff culture and conduct policy, and staff training.¹⁰
40. Compliance continues to be monitored by a combination of self-auditing by Serco and oversight by the Home Office, which has 12 members of staff working across the Gatwick IRCs estate.¹³ Mr Hewer explained that Serco provides data through:

“an agreed reporting structure, a balanced scorecard on a weekly and monthly basis … performance is also discussed at the Weekly Operations Review Meeting (‘WORM’) and the Monthly Operations Review Meeting (‘MORM’)”.¹⁴

When asked how Serco ensures that serious incidents are now reported, he emphasised that “it is really about that ethical behaviour … part of the training of the managers and SMT [Senior Management Team] is to ensure that we report all information”. ¹⁵

41. Mr Riley’s view was that it was too soon to comment on the effectiveness of the new Brook House contract, as the Covid-19 pandemic and consequential low capacity and limited regime made it difficult to assess whether cultural changes and staffing improvements have been delivered.¹⁶ The evidence the Inquiry has seen – in particular in relation to current staff culture and the use of Brook House to house vulnerable individuals – suggests that there is still significant room for improvement. I am therefore recommending an active and robust approach to performance management.

Recommendation 1: Robust monitoring of contract performance The Home Office must actively and robustly monitor the performance of the Brook House contract, including satisfying itself that any self-reported information is accurate. This may include engagement with monitoring bodies and appropriate stakeholders. Penalties must be attached to inadequate self-reporting.

1. Home Office offers £260m to run Gatwick immigration detention centres, civilserviceworld.com, 2 August 2019[↩]
2. SER000226[↩]
3. HOM0332165 para 102[↩]
4. HOM0332005_009 paras 25 and 26[↩]
5. HOM0332051_006-007 paras 28-29[↩]
6. SER000226_203; SER000226_210-215; HOM0332051_008 para 37[↩]
7. SER000226_210-215[↩]
8. SER000226_0203; SER000226_0210-0215[↩]
9. SER000451_004 para 11[↩]
10. SER000451_007 para 23[↩][↩]
11. Steven Hewer 1 April 2022 35/1-38/2[↩]
12. Steven Hewer 1 April 2022 36/23, 37/22-24[↩]
13. Daniel Haughton 16 March 2022 90/5-10. The Home Office team is split into three groups: Operations (dealing with day-to-day issues), Performance (carrying out the main compliance and performance monitoring) and Assurance (assuring self-reporting and monitoring third-party recommendations) (INQ000057_003 paras 8-9[↩]
14. SER000451_004 para 10[↩]
15. Steven Hewer 1 April 2022 31/20-32/2[↩]
16. HOM0332051_005 para 25[↩]