Guardian: Rich pickings in the world of asylum seekers

Rich pickings in the world of asylum seekers

Company made millions through Home Office housing scheme

Owen Bowcott and David Pallister
Wednesday August 3, 2005
The Guardian

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 =A340m.

In that time Ms Davey, 48, has formed 57 other companies. On top of big
dividend payments, she awards herself a salary of around =A3=BDm. She is
the sole director. That is the sort of basic pay expected by the head
of one Britain's top plcs.

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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 Estate 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 =A31bn a
year. Last year it spent =A3439m on accommodation alone, =A325m 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' 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
=A3700,000 and Ms Davey picked up a dividend of =A3300,000.

With a five-year contract from Nass that amounted to =A320m 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 =A3102 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."

"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 Julia 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."