How Home Office makes millions a week from outsourcing visas to Dubai-based firm accused of exploitation

Exclusive: UK government made £438.1m in the last year alone after outsourcing operations to a Dubai-based firm that has been deluged with complaints

The Home Office has increased its profit on UK visas by millions of pounds a week since outsourcing visa operations to a Dubai-based firm that has been deluged with complaints and accused of exploiting vulnerable applicants for profit, The Independent can reveal.

VFS, which has its headquarters in the UAE but is owned through holding companies in Jersey, the Cayman Islands and Luxembourg, faces claims of “gross maladministration” and “aggressive” selling of optional services since taking the UK government contract in 2014.

During that time, the Home Office has made £1.6bn from applicants looking to visit, study or be reunited with their families – a nine-fold increase on the five years prior to the start of the contract.

A joint investigation by The Independent and Finance Uncovered found the amount the department makes on average per visa application has increased from £28.73 to £122.56.

VFS, which is contracted to process visas from all countries outside Europe and Africa, handles applications to work, study and live in the UK, as well as visit.

People applying through VFS – the majority of whom are from lower-income countries, with a quarter from south Asia – have said they missed flights and were wrongly denied visas due to delays and administrative errors, including apparent failure to scan vital documents.

Others said they had faced a barrage of “optional” services on the VFS website, ranging from document checking for around £5, to a “super priority” visa service costing as much as £1,000, which some said failed to deliver on the fast-tracked service promised. Lawyers said these additional services could exploit vulnerable migrants who may feel pressured to spend more to secure visas.

Meanwhile, VFS has increased its average revenue per applicant by 38 per cent between 2016 and 2018 by selling more premium services, according to an analysis of group accounts filed in Luxembourg.

'What you get for your extra money'

Email service (per query): £5.48

Telephone helpline (per minute): £1.37

Form filling assistance via phone £61.72

Round trip courier service: £115.20

On demand mobile visa:  £1,641

Gold premium package (includes super priority visa, walk-in without appointment, form filling assistance and health concierge): £1,564

Settlement premium package (includes priority visa for settlement or migration service, form filling assistance, application and document checks, courier service):  £1,645

* All figures for US residents travelling to the UK

Prior to the contract, the majority of UK visa applicants could submit their applications in British embassies or consulates, where their documents would be processed and decisions would be made, and where there was no system of offering priority or “added value” services.

But when the service was outsourced in 2014, decision-making was concentrated in larger hubs run by VFS, which the Home Office said at the time would “improve the efficiency and consistency” of decision-making.

Fees have increased since then, with the cost of applying for a standard visit visa – the most popular type – rising by 14 per cent, from £83 in 2014 to £95 in 2019. Applications for settlement have increased from £885 to £1,523, a rise of 72 per cent.

However, analysis of Home Office annual accounts shows that the department’s surplus from visa applications has increased at an even higher rate. The figure stood at £178.6m for the five years before 2014, but over the past five years, the department has made £1.6bn, and £438.1m last year alone – equating to £8.4m each week.

(Statista https://www.statista.com/chartoftheday/ (Statista https://www.statista.com/chartoftheday/)

The contract handed to VFS made it mandatory for contractors to provide certain “premium services”, including premium lounges and priority visa services, some costing in excess of £1,500. The Home Office said that when the contract was renewed in 2018, premium lounges were removed as a mandated service.

Fees were also introduced for applicants wishing to make a query about their application, at £5.48 per query for the email service and £1.37 per minute for the phone helpline.

Contract documents released under freedom of information laws to Finance Uncovered show the Home Office takes a cut of the revenues these premium services generate, but the department refused to state how much it has received.

The Home Office insisted it did not make a profit from visa applications and said income generated from visa fees funded the wider immigration system – an apparatus which includes the controversial immigration detention estate, on which the department spent £523.5m between April 2013 and March 2017.

Labour’s shadow home secretary Diane Abbott said the scale of the charges was “truly shocking”, adding: “These are people who we have welcomed here, for work, for business, for study. The Home Office should not be ripping people off, and profiteering by private companies has no place in public services.”

Nicole Francis, chief executive of Immigration Law Practitioners’ Association, said the organisation was concerned about the “poor level of service” provided by VFS and the Home Office benefiting from the offer of premium services. She added: “The information collected as part of this article suggests that we were right to be worried.”

She expressed concern that the premium services being offered "may exploit vulnerable and less well-informed migrants,who may feel pressured to purchase an expensive service which will not provide them with any benefit".

John Vassiliou, partner at McGill and Co solicitors, said VFS had “been allowed to flourish despite this lack of competence” and claimed the Home Office did not exert enough control over outsourced visa services.

“It’s gross maladministration,” he said. “Our clients have had to endure stress, hassle, disruption to their lives, and significant legal expenses in order to resolve what ultimately was a very simple yet significant failure on the part of VFS: scanning essential documents.”

The Independent Chief Inspector of Borders and Immigration is investigating the outsourced visa system, with a report due later this year looking at customer experience and whether the contract had delivered on the promised benefits.

The figures come following widespread concern over the privatisation of the Home Office’s in-country visa system, which was outsourced to French firm Sopra Steria in November and has since, according to lawyers, offered a “substandard” service for “inflated” prices. A Sopra Steria spokesperson said at the time that its service was experiencing “higher than anticipated demand” and that it would be increasing the availability of free appointments at its core centres.

A Home Office spokesperson said it demanded the highest standards from service providers. A VFS spokesperson said optional services were “developed in response to specific demands from applicants for greater accessibility, personalisation and convenience in visa services – they are determined in consultation with, and agreed by, the respective governments”. They added that the services were clearly labelled as optional, while visa decisions were “the sole prerogative of the concerned embassy/consulate”.