The mishandling is so serious that councils have threatened to pull out of a “dispersal” scheme to house asylum seekers, in a move that could have “severe” consequences for vulnerable people.

Two years after warning asylum seekers were routinely living in unsafe, unsanitary and substandard housing, the home affairs select committee said “very little has improved”.

Pregnant women, torture survivors and people suffering from PTSD are housed in damp, vermin-infested and badly maintained homes as a result of a failed inspection and compliance regime, a new report has revealed.

“Local authorities have lost confidence in the system because the government has failed to listen and respond to their concerns,” Stuart McDonald MP, a member of the committee, said.

“Glasgow, Manchester, Wolverhampton and communities across the UK have done so much to support those seeking asylum in the UK. Yet, the government has done little to support them.”

A handful of mostly poorer local authorities across the UK have housed a disproportionate number of asylum seekers, and the pressure to support often vulnerable people has been made more difficult by government mishandling, the report claims.

The MPs recommended that the responsibility for inspecting accommodation should be transferred from the Home Office to local authorities, along with additional funding.

“Local authorities who step up and continue the UK’s proud tradition of providing asylum must not be placed at a financial disadvantage because of it,” Mr McDonald said.

“We must remember that this is fundamentally about providing safe accommodation to individuals fleeing desperate circumstances.”

The news comes weeks before the government agrees contracts for providing asylum accommodation, worth £4bn over ten years, replacing the previous COMPASS contracts.

The Home Office said it considered requests from people who have particular vulnerabilities when considering specialist accommodation for asylum seekers.

“We also monitor contractors and their accommodation closely and take action – including financial penalties – where issues are not addressed within certain timescales,” a spokesperson said.

“We continue to work closely with local authorities on asylum dispersal and have committed to comprehensive engagement with the Local Government Association and Local Authority Chief Executives to review the process.”

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