Between 2001-02 and 2005-06, the Home Office spent £29.1 million planning and designing a purpose-built accommodation centre for asylum seekers at Bicester. It was an innovative pilot project and formed part of a wider Home Office initiative to cope with rising numbers of asylum applications by speeding up the processing of asylum claims and reducing the social tensions and the risk of fraud inherent in the way that asylum seekers were dispersed around the UK.

Falling numbers of asylum applicants, a rise in the projected net cost of the planned facility at Bicester, and a general improvement in the speed of processing asylum applications under the existing system, led to the cancellation of the Bicester Centre and the shelving of the wider accommodation centre policy in June 2005. As the project was cancelled before building work began, the only benefit to the taxpayer is the semi-derelict site, valued at some £4.6 million, which remains in the Home Office's ownership.

The strength of opposition to the proposed accommodation centres from national refugees groups and local resident groups, which was identified during the passage of the Nationality, Immigration and Asylum Act 2002, was not fully reflected in the business case for Bicester. The business case also did not take into account the potential adverse impact on cost and delivery arising from a protracted planning delay. The decision by the Home Office to sign the contract with its preferred bidder before completing the outline and detailed planning processes increased the risk of nugatory expenditure.

The lessons to be learnt from Bicester have wider application to government bodies planning innovative projects. These lessons include: the need to strengthen corporate governance arrangements where consultants are engaged at an early stage, to co-ordinate policy changes in different parts of an organisation together with consideration of external events, and to increase the effectiveness and scope of consultation with the local community and other stakeholders.

On the basis of a Report by the Comptroller and Auditor General,[1] we examined the Home Office on the reasons why the cancellation of the wider accommodation centre policy resulted in nugatory expenditure of £29.1 million being noted in the Home Office's financial statements. We also examined the potential future use of the Bicester site.