Cost of chaotic asylum system

The grossly sub-standard accommodation endured by families in the Parkside Hotel is the inevitable result of chaos in the asylum system which has left London boroughs facing a £27 million annual deficit.

After years when the bulk of asylum seekers converged on London and the South-East, the Government set up the National Asylum Support Service to ease the pressure. Since April 2000, the agency has dispersed almost 30,000 fresh claimants around the UK. But there are still tens of thousands in London who made their claims before that month, and it remains the duty of councils to support them.

The Association of London Government says boroughs continue to support 57,000 single adults, families and unaccompanied children.

In theory, boroughs can claim back from the Government money they spend housing asylum seekers. But London's crippling accommodation costs have left authorities badly out of pocket. A recent study by spending watchdog the Audit Commission concluded the system imposed "rough justice" on councils in the capital.

The study noted that the Government's threshold for reimbursing councils was fixed at a flat rate of just £140 a week for adults and £240 for families. But with London rents commonly topping £1,000 a month for a one-bedroom flat, the acute shortage of affordable housing made those figures completely unrealistic, and councils often found themselves paying much higher bills to private landlords, bed and breakfasts and hotels.

In fact, most authorities rely almost entirely on these options.

Grants for families looked after by London boroughs were increased to £350 a week earlier this year as the Government moved to head off criticism, but the cost to councils varies wildly. Some families have been kept in hotels at more than £1,000 a week, while other authorities have paid under £45 per week by seeking housing outside London, the Audit Commission found.

Newham council arranges six-month contracts with hotels and negotiates weekly bed and breakfast rates of between £70 and £98. At the other end of the scale, Lambeth was criticised by the Audit Commission for paying more than £1,000 a week in some cases, before striking a deal through local estate agents to use private rented property at a cost of around £200.

Housing London's needy is like a manic game of musical chairs, with councils competing to find limited places, so it is inevitable they turn in desperation to some dubious private landlords.

The problem is compounded by competition between housing and social services departments, which have responsibility for different categories of asylum seeker, and by councils' duty to look after the 39,000 homeless households in temporary accommodation in the capital.

And the Government's plans for reception centres for fresh asylum claimants do not help London's 57,000.