Accommodation contractors earn €1.6bn in 20 years of direct provision

Costs rose significantly in the past two years, with the Covid-19 pandemic leading to extra accommodation needs, reports Maresa Fagan
Accommodation contractors earn €1.6bn in 20 years of direct provision

A protest calling for the end of the direct provision system. File picture: Eamonn Farrell/RollingNews.ie

Costs rose significantly in the past two years, with the Covid-19 pandemic leading to extra accommodation needs, reports Maresa Fagan

Accommodation providers have earned over €1.6bn in direct provision accommodation contracts since 1999.

That is according to figures furnished by the Department of Children on the overall cost of direct provision accommodation for asylum seekers between 1999 and 2020.

A breakdown of annual spending shows that costs have increased significantly in the past two years, when yearly spending soared to €129m in 2019 and €183m last year.

The increased costs largely stem from the need to provide emergency hotel and bed and breakfast accommodation at €100 per day because existing direct provision centres were at capacity and following a rise in applicants in 2019.

Last year alone, this type of emergency accommodation cost €45m.

The department confirmed that no intermediary payments were made to parties who helped to source emergency accommodation.

An additional €18m was spent on providing extra accommodation and isolation accommodation last year to manage Covid-19 and reduce occupancy in centres so that no more than three non-related persons were sharing a room.

A further breakdown of contracts awarded between 2000 and 2018 shows that a small number of businesspeople have earned significant sums of close to €100m and more over the past two decades.

The most up-to-date contract figures available from the International Protection Accommodation Service (IPAS) show that the owners of the Mosney holiday centre in Meath have been the biggest earners to date, receiving almost €150m to the end of 2018.

Other key contractors include:

  • East Coast Catering, owned by Canada-based businessman Patrick O’Callaghan;
  • Bridgestock companies owned by Seamus and Michael Gillen;
  • A number of companies involving Cork businessman Alan Hyde;
  • Several companies involving Wicklow businessman Sean Lyons Sr;
  • Cork-based Millstreet Equestrian Services, headed up by Thomas Duggan.

The level of profits being made from running these accommodation centres is far from clear, in particular as a number of the larger operators have moved to unlimited company status in recent years, meaning they do not have to publish annual financial accounts.

The department said it does not disclose contract values for the most recent two-year period, although details of contracts are easily accessible on an EU tender site.

Figures collated by the Irish Examiner suggest that further contracts amounting to over €800m were awarded in the past two years based on EU contract-award notices.

The contracts include some of the firms already mentioned, with some four-year contracts costing as much as €46m.

Asked why up-to-date contract information was not available , a spokesperson for the department said: “It is not in the interest of yielding best value for the taxpayer that the details of current individual contracts are made available to other commercial bodies who are, or may in the future be, engaged in these negotiations.” 

As of December last, almost 7,000 people were living in the direct provision system.

The Government has committed to abolishing the current for-profit system by developing six regional reception centres and own-door accommodation in the community by 2024. The new model is being developed for a maximum of 3,500 asylum seekers.

The system has been heavily criticised by several rights groups, including the Ombudsman for Children, the Irish Human Rights and Equality Commission, the Special Rapporteur for Children, and the United Nations Committee on Economic, Social, and Cultural Rights and the Committee for the Elimination of Racial Discrimination.

Mosney

By the end of 2018, the former Butlin’s holiday camp has earned close to €150m for providing accommodation and other services to house asylum seekers in Meath.

The 300-acre Mosney site is one of the biggest direct provision accommodation centres in the country, housing around 600 asylum seekers at any one time.

The company, which is run and owned by Drogheda businessman Phelim McCloskey, also provides emergency accommodation.

Last year, Mosney was awarded a four-year contract worth €37m, according to EU tender notices.

The company became an unlimited firm in 2012. The last set of accounts presented show that the family business had a turnover of €7.8m in 2010.

The operation is owned by Sonning Unlimited, a company registered in the Isle of Man, of which Mr McCloskey is a director.

East Coast Catering

Canada-based businessman Patrick O’Callaghan is behind East Coast Catering, which has been paid €137m to provide direct provision accommodation in Dublin and Louth.

The company runs the Balseskin Reception Centre in north Co Dublin, as well as Hatch Hall in Dublin City and Carroll Village in Louth.

Hatch Hall direct provision centre in Dublin City.
Hatch Hall direct provision centre in Dublin City.

Mr O’Callaghan was named as the Atlantic 2012 Ernst & Young Entrepreneur of the Year. In a 2013 video posted on the Financial Post website, he said the ability to see opportunity where others saw risk was one of the key attributes to being an entrepreneur.

Bridgestock County

Roscommon-based business Bridgestock has been a key provider of direct provision accommodation, with centres and emergency accommodation in Galway, Mayo, Offaly, Sligo, Leitrim, and Roscommon.

By the end of 2018, Bridgestock Ltd and Bridgestock Care, which are operated by Seamus and Michael Gillen, had been paid over €115m by the government for accommodation while also holding contracts for supplies.

Over the past two years, Bridgestock Care was awarded contracts to the value of €130m for accommodation and other services, according to EU tender notices.

The largest contract was for €46m in 2020 for accommodation in the border counties over four years. The company also secured a contract in 2019 to provide €10m worth of supplies over four years.

The company became unlimited in 2011 and the owner is registered as two companies, Bridgestock (BVI) Limited and Unlimited in the British Virgin Islands.

Companies involving Cork businessman Alan Hyde

Alan Hyde is involved with seven companies contracted to provide direct provision accommodation across Cork, Limerick, and Waterford and which have received over €100m to date.

The companies include Stompool Investments Limited, Barlow Properties, Bideau Ltd, Baycaster Limited, D and A (Pizza) Limited, Oval Rock, and Alliance Leisure Limited some of which have since been dissolved. Fellow Cork businessman Tadgh Murphy has also been involved in a number of these companies.

The accommodation centres include Clonakilty Lodge, the Glen Vera centre in Cork City, Mount Trenchard in Limerick, and the Ursuline Complex in Waterford, among other smaller centres.

Over the past two years, D and A Pizza Ltd was awarded contracts worth over €116m for accommodation; the biggest contract was for €39m in 2020 for accommodation in Cork and Kerry, according to EU tender notices.

Companies involving Sean Lyons 

Wicklow businessman Sean Lyons and his son Sean Jr and Graham Carry have numerous interests in the direct provision system, with several companies receiving over €91m by the end of 2018.

The companies providing accommodation to date include Fazyard Limited, Georgian Court Limited, Oscar Dawn Ltd, The Old Rectory (New Ross) Limited, Rowtes Limited, Warrens House Limited, Mint Horizon, and Old George Ltd.

Over the past two years Oscar Dawn Ltd, which runs the Hazel Hotel in Kildare, was awarded a contract for €42m, while Fazyard Ltd was awarded a contract for €36m for four years, according to EU tender notices.

Millstreet Equestrian Services 

Cork-based company Millstreet Equestrian Services has been a regular contractor for direct provision accommodation over the past 20 years.

To the end of 2018, the company led by Thomas Duggan, has been paid over €85m to provide direct provision accommodation across Cork, Kerry, Tipperary, and Waterford.

Over the past two years, the Millstreet venture was awarded contracts worth €125m; the largest contract was awarded in 2020 for €39m for accommodation in Cork and Kerry, according to EU tender notices.

The company became unlimited in 2010. Company filings show it increased its turnover to €8.6m in 2018 due to the opening of two new centres and also recorded pre-tax profits of €2.36m that year.

Company filings state the firm is owned by two companies registered in the Isle of Man, Arbella Unlimited and Tolosa Ltd.

Covid impacted ombudsman's ability to visit centres

Ombudsman Peter Tyndall: Covid-19 highlighted the unsuitability of some accommodation in direct provision. File picture: Sam Boal/Rollingnews.ie
Ombudsman Peter Tyndall: Covid-19 highlighted the unsuitability of some accommodation in direct provision. File picture: Sam Boal/Rollingnews.ie

The Government must first move asylum seekers out of inappropriate emergency accommodation as it forges ahead with plans to end the current direct provision accommodation system.

That is according to Ombudsman Peter Tyndall, who expressed continued concern over the use of hotels and B&Bs to provide emergency accommodation for more than 1,100 asylum seekers.

Mr Tyndall was speaking to the Irish Examiner as his office confirmed a fall in the number of complaints about the direct provision system in 2020.

The Covid-19 pandemic not only highlighted the unsuitability of many of the congregated direct provision centres but also impacted on the ombudsman’s ability to visit centres and meet with residents.

The ombudsman received 61 complaints last year compared to 168 in 2019, with issues around Covid-19 and transfers to other centres or isolation facilities to the fore.

“The number of complaints is down considerably because we had to curtail our outreach programme; we couldn’t visit centres and that’s our main source of complaints,” Mr Tyndall said.

“We are trying to find a way to safely recommence our outreach programme and exploring all of the options available to us,” he said, adding that he hoped this would happen by autumn, if not before.

Transfers between centres continued to be a big issue last year as well as Covid-19.

People were concerned about moving to the isolation facility at Citywest and between centres. There were concerns about the capacity of centres to deal with Covid and socially distancing and so on.

On the issue of accommodation standards, the ombudsman said “several” accommodation centres did not have contracts renewed where they fell down on standards, which represented a “substantial sanction”.

Mr Tyndall said a shift by the department to procure apartments blocks in Letterkenny and Galway and other locations was a welcome move towards providing ‘own-door’ accommodation.

Aside from accommodation, other changes such as the right to work had already made an “enormous difference” and moves were now being made to enable asylum seekers to obtain a driving licence and open a bank account.

The move towards more facilities with self-catering was also making a difference. “I was struck by children who had never seen their parents prepare a meal because they were in direct provision. That’s gradually changing and has made a big difference to people’s morale.” 

The continued use of hotels and B&Bs to accommodate more than 1,000 asylum applicants, however, remains Mr Tyndall's greatest concern and will be prioritised by his staff when outreach resumes.

“There are still more than 1,100 people living in emergency accommodation which doesn’t meet the standards,” he said, adding that the department was “moving in the right direction” to reduce numbers but there was still a “way to go”.

“It’s perfectly suitable for a very short period but to spend months in it or even longer it’s not appropriate,” he added.

While welcoming the recently published white paper on ending the direct provision system, Mr Tyndall said one of the first actions should be ending the use of emergency accommodation: “First of all they need to get people out of emergency accommodation and then gradually move away from the less suitable centres”.

The white paper model, he said, had the potential to deliver in the medium term if adequately resourced.

Equality and Integration Minister Roderic O’Gorman at the launch of the white paper on ending direct provision in February. Picture: Keith Arkins
Equality and Integration Minister Roderic O’Gorman at the launch of the white paper on ending direct provision in February. Picture: Keith Arkins

“I’m absolutely convinced that they have chosen the right course. Provided that it is properly resourced it is a model that can deliver,” he said, adding that any own-door accommodation developed could be repurposed for other housing needs if demand fell into the future.

“There is progress but there is quite a long way to go,” he said.

The Movement of Asylum Seekers in Ireland (MASI) said the pandemic highlighted the overcrowded living conditions facing many asylum seekers and that it would have expected the number of complaints to be higher given the challenges around Covid-19.

MASI founding member Lucky Khambule, who described the current system as “oppressive”, said action is needed to deliver on the many “positives” in the white paper proposals.

The fall in asylum applications in 2020 and this year, he said, provided more scope for the department to start progressing the proposals this year.

“What we want to see is the proper implementation of the promises made in the white paper,” Mr Khambule said.

We need visible short-term goals and we need to see things beginning to happen this year.

Lack of transparency on government spending

A lack of transparency around government spending on for-profit operators of direct provision accommodation has only served to create distrust and concern among residents and taxpayers, the Irish Refugee Council has said.

IRC chief executive Nick Henderson said the lack of transparency around direct provision accommodation highlighted the need to move to a not-for-profit model, as recommended in the recently published white paper.

Nick Henderson: Asylum process needs to be reset. 
Nick Henderson: Asylum process needs to be reset. 

The fact that private companies are not prepared to be transparent in how they are making money from the system is really a big problem. 

"It creates distrust and it is concerning from the taxpayers perspective and also for those living in the system,” he said.

Mr Henderson said the asylum process needs to be “reset” given the large number of people awaiting decisions in the system.

An advisory group recommendation to give people, who were waiting more than two years for a decision, permission to remain hasn’t been taken on board to date, he said.

As the Government moves to replace the current system with State-run reception centres and not-for-profit own-door accommodation by 2024, it must “simultaneously” clear the backlog in asylum applications, he said.

A “transition and implementation strategy” and new agency with clear budgets and timelines is needed to progress the white paper proposals, he added.

“The white paper parks a lot of the implementation this year to focus on developing a strategy. I understand that but there is a risk that we will kick the can further down the road. What we need is momentum. We need to start seeing some movement on accommodation this year,” Mr Henderson said.

He pointed out that national standards, signed off in 2019, were not universally applied to all accommodation settings and did not apply to emergency accommodation.

Basic inspections are currently carried out by IPAS officials and an independent inspection agency, QTS.

The Health and Information Quality Authority (Hiqa) is expected to carry out inspections against national standards in the future, although there is no clear timeline for when this will happen.

Hiqa said legislation will be required before it can assume an interim inspection role and additional resources will also be required.

“This timeline is dependent on the legislative changes being made to allow Hiqa to do this and the allocations of funding to the programme,” a Hiqa spokesperson said.

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