A beleaguered property company which is set to step back from the management of homes for asylum seekers has said the government is not putting enough money into delivering support.
Orchard and Shipman's chairman Chris Shipman spoke out after it emerged it is set to lose control of the management of asylum seeker homes in a move he says is about finance rather than being under pressure over the complaints over the treatment of refugees in Scotland.
O&S has managed the £221 million Home Office contract to provide "safe, habitable homes" for asylum seekers in Scotland and Northern Ireland on behalf of international service company Serco since September, 2012.
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But it says firms controlling the contract are actually subsidising the service, as it will cost them nearly £150 million to do the work.
Serco estimates it will lose over £145 million in the six-year life of the contract as they are dealing with more asylum seekers than was envisaged by the Home Office.
O&S says it will cost the firm £2 million in the four years of the contract so far to help refugees having received £64 million. Most of the loss is in this financial year.
Mr Shipman who said he was "feeling pretty beaten up" by the hammering his company has had over living conditions for asylum seekers says there has been increased costs because they are having to use hotel accommodation.
He said that making use of empty properties around Glasgow for asylum seekers would have wiped out the £2.25 million that is expected to be spent on housing refugees in hotels this year alone.
Mr Shipman admits that Serco are in a better position to manage asylum seeker accommodation.
But he insists that more funds have to be put into the service as the reputation of Britain was being damaged by the reports of poor conditions.
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Serco confirmed it is now looking to take control of the service from O&S and is seeking "the best way to continue to deliver housing services for asylum seekers".
The move came just over a week after representatives of O&S and Serco were summoned before MPs on the home affairs committee over allegations that asylum seekers were being mistreated and housed in substandard conditions.
Chris Shipman defends his firm from MP heat over asylum seeker living conditions. Source: parliamentlive.tv
Susan Munroe, chief executive of Freedom from Torture told MPs reports from their clients indicated issues with accommodation were worse in Glasgow than any other parts of the UK.
Secro's discussions with O&S (Glasgow) Ltd will mean it will directly handle the provision of the 4,700 asylum seekers in Scotland and Northern Ireland.
The 60 O&S staff would become Serco employees, once due diligence over the transfer is successfully completed.
Mr Shipman said that even if there is no agreement over the transfer, his firm will not be looking to be re-bidding when the contract is finished.
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"It is currently underfunded, it wasn't intended that way," he said. "The government was trying to get best value. It is providing good value to the taxpayer right now. But unless we sort out the fundamental issues with the contract when it comes up for re-bidding, its underfunding will be taken into account by anyone bidding next time round, and it will cost the taxpayer more than it needs to.
"Ultimately we have got to provide good quality services in a way that is commercially viable, and provides good value to the public purse.
"The accommodation does meet the Home Office standard, but if the standard is to be higher then you have to pay more for that.
"When we started there were about 2,700 asylum seekers and there are now 4711, so there are a lot more than anyone imagined.
"There are some fundamental things that can be done to improve the quality of the asylum service and the reputation of Britain for providing these services. Because when we get the stuff that is out in the media, if I was reading that I would think, this is atrocious. It's absolutely horrible, which isn't the case.
"But it won't be O&S that does it. We are too small and frankly been too battered now.
"I'm not saying it's not good work that has been now. I'm just saying there's a lot of room for improvement."
The O&S chief, who told the home affairs committee that the bulk of the allegations had been made by a single disgruntled employee, said that there had been no prompting from any external body or the Home Office to put pressure on O&S to stop running the contract.
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"This was a mutual discussion between ourselves and Serco, and my belief is that this is the best thing for the people we currently employ and for the service users. Because Serco have invested huge amounts in getting to where they are now and are determined to run the service in a professional way and to a very high standard.
"My opinion is that Serco are better place to take this service, which meets all the minimum lettable standards and the vast majority of the timescales on repairs.
"We have a handful [of repairs] that don't meet the specification and those are the ones that tend to hit the press.
"Serco are in a position to provide a service over and above what is required in the contract to provide a really good quality service, O&S isn't.
"I don't say that its a perfect service. The complaints rates are very very low and probably too low because we need to know how best to engage with the asylum seekers, and encourage them to complain, because that is actually beneficial to providing a good service.
"We haven't worked in an area that has been so politicised and we should have been better at engaging with the Scottish Refugee Council and other organisations. That would be a fair criticism."
The Scottish Refugee Council said it wants a new model altogether of providing the service, one that "recognises and meets the specific needs of people at a very vulnerable time in their lives".
A council spokesman added: "However, within the term of the current Home Office contract we want to see some oversight from Scottish ministers and local councils to make sure the accommodation provider, whether that's Serco or any sub contractor, is meeting these needs and providing accommodation of an appropriate, basically habitable and safe standard."
Rupert Soames, chief executive of Serco has insisted that the contract is actually working very well with accommodation that met Home Office standards.
The Home Office were approached for comment.
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