MPs sitting on the Public Accounts Committee (PAC) have criticised asylum seeker housing contracts after savings targets failed to materialise.

Six contracts with three outsource services providers including G4S and Serco were designed to achieve savings of £140 million over seven years, however the targeted savings are appearing increasingly distant after just £8 million in savings was achieved in the first year.

The PAC have criticised the move in 2012 to switch to six contracts with three outsourcing providers from 22 contracts with 13 suppliers, attacking large inflexible contracts which threaten increased risk and go against the public sectors encouragement of SMEs.

A Home Office spokesman, said: “While we accept there are challenges with the contracts, we are disappointed with the PAC’s findings and will respond in due course.”

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