Blunkett vows to curb soaring asylum costs

David Blunkett, the Home Secretary, pledged yesterday to drive down the cost of dealing with asylum-seekers after it was revealed that £1bn had been spent on them in the past year.

The Government has set aside only £403m for coping with refugees, sparking Tory accusations that the handling of the asylum system had "spiralled completely out of control".

Ministers are also bracing themselves for a fresh influx of asylum-seekers if war breaks out between India and Pakistan.

Figures from the Immigration and Nationality Directorate disclosed that asylum-seeker costs for 2001-02 were estimated at a record £1.052bn. Given current trends, that figure could rise to £1.47bn next year – more than £1bn more than the budgeted figure.

The black hole in the Home Office's spending plans could force Mr Blunkett to make a plea to the Treasury for emergency help. He said yesterday that he had inherited budgets set in the 2000 Comprehensive Spending Review, which required a "readjustment" in the light of the growing numbers claiming refugee status in Britain.

Mr Blunkett said that controversial measures he proposed last week, to remove swiftly those whose claims for refugee status were clearly unfounded, would tackle the problem.

He accepted that the financial problems were due in part to inefficiencies in the system, but said: "It's a damn sight more efficient than in 1997, when the average turn-around time was 20 months. It's now a year, and we have got 70 per cent of the cases in the last two months through the initial decision-making process in the target date of two months."

But Oliver Letwin, the shadow Home Secretary, said: "Of course we all accept that this country has a duty to find a secure home for those fleeing persecution, and of course that will cost a certain amount of money. But the great bulk of the expendituresare not on those found to be genuine refugees... They are on the system of processing applications, which takes months, indeed in some cases years."