The National Asylum Support Service has agreed to direct asylum seekers away from areas of low housing demand from next year.
NASS has come under fire because private landlords, operating under five-year NASS contracts, have bought up cheap homes in low-demand areas of the North and Midlands and used them to accommodate asylum seekers. Market renewal pathfinders must then pay more for the compulsory purchase of homes destined for demolition and become responsible for rehousing the asylum seekers.

A Home Office spokesman said: "When we come to renew the contracts [next year], we will work with the Office of the Deputy Prime Minister to avoid areas identified for regeneration."

Richard Kemp, vice-chair of the Local Government Association's housing executive and former executive member for housing at Liverpool council, said: "I'll believe it when I see something happening. The government seems totally unable to join up on this issue.

It couldn't have been a bigger shambles if they'd tried."

Brendan Nevin, director of the North Staffordshire pathfinder, which has 3000 asylum seekers and refugees in its area, added that the current dispersal policy moved people to areas with already overstretched infrastructure.