Corporate Travel Management (CTM), the Australian firm responsible for managing accommodation for asylum seekers – including the Bibby Stockholm barge – has admitted to overcharging the UK government by £118 million. This figure represents a significant increase from earlier estimates.

Overcharging Discovered Through Audit

The issue stemmed from “erroneous billing” identified during a forensic audit conducted by KPMG. CTM initially reported a £77.6 million accounting error, but the KPMG investigation revealed the total overcharge to be £118 million – an increase of £40 million.

Background of the Issue

The origins of the overcharging date back to 2021, when CTM was contracted to urgently procure accommodation for a surge in asylum seekers arriving in the United Kingdom. The company secured over 1.4 million nights of accommodation across more than 60 hotels.

By late 2022, internal reviews highlighted discrepancies totaling £54.6 million between billed amounts to clients like the Home Office and actual hotel payments. This prompted the more in-depth KPMG investigation.

Bibby Stockholm and Government Contracts

CTM has a history of securing public sector contracts, with a total value of £3.9 billion over the past decade. This includes a £1.6 billion contract related to the Bibby Stockholm barge project.

The Bibby Stockholm, intended to house hundreds of asylum seekers in Portland, Dorset, was a key part of the previous Conservative government’s plan to reduce asylum seeker housing costs. However, the project was abandoned in July 2024 after a change in government.

Home Office Response and Recovery Efforts

The Home Office has confirmed an ongoing internal investigation into CTM’s contracts. A spokesperson stated that over £70 million has already been recovered from asylum accommodation contracts deemed to be poor value for money.

The Home Office also reported that changes to contract management have resulted in £700 million in hotel cost savings, demonstrating a commitment to ending the use of hotels for asylum seeker accommodation.

CTM's Response and Trading Suspension

CTM’s shares have been suspended on the Australian Securities Exchange since August of the previous year. Chairman Ewen Crouch expressed disappointment regarding the suspension and apologized to shareholders and affected clients.

Crouch stated the suspension is due to the board’s commitment to thoroughly investigate the issues and implement solutions. He characterized the announcement as a step towards resolving the situation and restoring investor confidence.