The government has ignored fraud warnings, say Tories

The disclosure has prompted the Conservatives to accuse the government of failing "lamentably" to tackle fraud in the system.

It follows an Audit Commission report in 2001 which found rising levels of benefit fraud by asylum-seekers' landlords.

In one case a company received �425,000 before it was found that it was claiming for non-existent asylum seekers.

This shocking new revelation is yet more proof of Labour's mishandling of the asylum system Oliver Heald

The report claimed the system was "open to exploitation by the unscrupulous" because "of its nature and the vulnerability of the asylum seekers themselves and the difficulty of checking a fluid population".

It added: "Although the incidence of these frauds is small, the individual value is very large."

'Ignored warnings'

But Home Office Minister Beverley Hughes, replying to a question by Tory frontbencher Oliver Heald, said "there have been no investigations into suspected cases of fraud or overpayment" since the National Asylum Support Service (NASS) was set up in 2000.

Mr Heald, the Conservatives work and pensions spokesman, said: "This shocking new revelation is yet more proof of Labour's mishandling of the asylum system.

"Labour have failed lamentably to tackle fraud in the asylum budget - a budget which is now approaching �3bn a year.

"They have ignored the Audit Commission's warnings and failed to conduct a single investigation into fraud by landlords over the past three years.

"It is no wonder that Britain's asylum system is in complete chaos."

We take fraud very seriously and that is why we issue ID cards with photographs and fingerprints to all asylum seekers Home Office spokesman

The investigations section of NASS did not become fully operational until May 2001.

Ms Hughes, in her response to Mr Heald, said NASS had entered into contracts with the private and public sector to provide accommodation for asylum seekers.

'Technical overpayment'

A set price was paid for the accommodation provided, but contractors were required to meet key performance indicators, she said.

"There have been no investigations into suspected cases of fraud or overpayment," said Ms Hughes.

"The method of payment used by NASS to pay contractors may, on occasions, result in a technical overpayment.

"This is caused by the need to make deductions from the contract price where there has been a failure to meet key performance indicators, but the system is self-correcting in subsequent months."

A spokesman for the Home Office stressed that fraud was taken "very seriously" and was the reason why asylum seekers supported by NASS were issued with ID cards with photographs and fingerprints, "something we had never done before last year".

"We also require asylum-seekers to report regularly to the authorities and have stopped giving support to those who do not claim asylum as soon as reasonably practical after arrival in the UK," the spokesman said.

"We have set up joint investigation teams to work with the Department of Work and Pensions, Customs and Excise and the Inland Revenue to tackle illegal working and reduce NASS fraud."