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 substantial increase from earlier estimates.

Overcharging Discovered Through Audit

The issue originated 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

In 2021, CTM was contracted to urgently secure accommodation for a surge in asylum seekers arriving in the United Kingdom. The company successfully arranged over 1.4 million nights of accommodation across more than 60 hotels nationwide. Internal reviews in late 2022 first highlighted inconsistencies, revealing a £54.6 million discrepancy between billed amounts and actual hotel payments.

Contract Value and Government Response

CTM has secured £3.9 billion in public sector contracts over the past decade, with the £1.6 billion contract for the Bibby Stockholm barge being a significant component. The Bibby Stockholm, located in Portland, Dorset, was central to the previous Conservative government’s plan to reduce asylum seeker housing costs.

However, the plan was abandoned in July 2024 when Labour took power and initiated a broader overhaul of the UK’s asylum system. The UK Home Office confirmed an ongoing internal investigation into CTM’s contracts.

Home Office Recoveries and Savings

A Home Office spokesperson stated that over £70 million has already been recovered from asylum accommodation contracts providing poor value. They also highlighted that recent changes to contract management have saved £700 million in hotel costs, demonstrating a commitment to ending hotel use for asylum seeker accommodation.

Impact on CTM and Future Outlook

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 UK clients.

Crouch stated the suspension is due to the Board’s commitment to a thorough investigation and resolution of the issues. He indicated the recent announcement is a crucial step towards resuming trading once auditors complete their procedures.

The substantial overcharging raises concerns about government contract oversight and ensuring value for money in essential services.