Detention centre operator Serco wants to move into NSW public housing, and is lobbying to bring a controversial business model trialled on asylum seekers in Britain to Sydney.

Serco needs to plug the revenue hole left as the federal government closes down immigration detention centres, once its biggest Australian money-spinner.

The Baird government will start transferring the management of public housing to community housing providers next year, and is expected to call for tenders in October.

A third of NSW public housing will be transferred to non-government organisations over four years, in tranches of about 1000 homes.

Serco has told the Baird government that community housing providers are too small to be efficient, and the state government should follow the British model of outsourcing to larger management companies.

But a British parliamentary inquiry found Serco and another company, G4S, had provided substandard public housing with pest infestations, and "intimidated" tenants by entering homes without knocking, under the Home Office contracts worth hundreds of millions of dollars.

Serco manages 20 subcontractors who provide accommodation, maintenance, job search and social services on housing estates.

Serco made only 21 pence per person per day under the contracts, the 2013 inquiry was told.

Serco's chief at the time, Jeremy Stafford, explained it bid at such a low margin because it wanted to create an accommodation management business that was "scalable" and could be exported to countries such as Australia.

Last year Serco sought to begin the global expansion, with chief executive Rupert Soames visiting New Zealand to express interest in a public housing sell-off, offering "systems" for community housing providers.

Serco has already made one secret pitch to the Baird government, through the Premier's Innovation Initiative, which called for social housing proposals in 2015.

The Baird government announced a major reform of public housing in January, flagging that it would invite private developers, investors and community housing providers to partner to redevelop estates.

Family and Community Services Minister Brad Hazzard met with Serco in June to discuss the social housing reform, his ministerial diary shows. Mr Hazzard declined to comment.

Serco's UK director of global bids and projects, Andrew Robertson, has joined a social housing lobby group in Australia which recently presented its research to federal Treasury.

A Serco spokeswoman said it had joined the Social Housing Capital Investment Fund Work Group because Serco wanted to "find a solution" to social housing in Australia, and aimed to encourage institutional investment.

"We support government and non-government agencies including not-for-profits by bringing expertise in large scale projects and from social housing experience in the United Kingdom where we provide integrated facilities management and housing services for welfare and immigration applicants."

But the NSW Federation of Housing Association's executive director, Wendy Hayhurst, rejected Serco's claim that community housing groups were too small.

"This is about providing very sensitive services to very vulnerable people – the ambition isn't to make money out of this to give to shareholders. People are in it because they want to make a difference," she said.

"I would be worried about someone who says, 'Give us loads of properties and we will do it really cheaply'," she said.

"There is no holy grail to make money out of poor people."

National Affordable Housing Consortium chief executive Mike Myers, who has held discussions about partnering with Serco, said the community housing sector "shouldn't try to create a closed shop".

A FACS spokeswoman said: "Homes will only be transferred to registered community housing providers or organisations who intend to register."

Serco reported in its half-yearly results that its "pipeline" of major bids in the Asia Pacific included "additional prison opportunities" in NSW.

Former Serco executive Gary Sturgess has been appointed by the Baird government to review whether NSW prisons should be outsourced.

In April, Serco appointed James Keene, an official with the Queenscliff Surf Life Saving Club, whose members include former prime minister Tony Abbott and Premier Mike Baird, to build partnerships with state and federal governments. Mr Keene's LinkedIn profile states his personal relationships with ministers, including the Australian Prime Minister, are "a unique skill set".

By Kirsty Needham, Sydney Morning Herald, 14.08.16

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