Home Secretary Alan Johnson said the Government will not be giving Croydon much extra money to deal with the increase in asylum seekers coming into the borough.
More than 3,500 extra asylum seekers could be visiting Croydon each year after it was made the only site for walk-in applications last month.
Immigration Minister Phil Woolas revealed to Parliament the Liverpool asylum centre dealt with an average of five to 10 appointments per day before it was closed on October 14.
Mr Johnson, who was speaking to the Croydon Guardian at last week’s annual Labour fundraising dinner, said he would wait to see how the new system worked in practice before providing extra funding. He admitted Croydon would “not be getting much extra”.
He said: “For the burdens that you do carry, we put lots of money into Croydon to help with that situation.”
In a response to a question in Parliament from Croydon Central MP Andrew Pelling, Mr Woolas said Croydon would be expected to deal with these extra claims at its Lunar House site.
The decision to make all walk-in asylum applicants visit Croydon will cost the council an extra £8m, according to the council’s lead member for safety and cohesion Gavin Barwell.
He said the £30m funding provided by the Government was £3m short of the actual cost to Croydon Council, while additional indirect costs, such as providing education for asylum seekers’ children, amounted to an extra £5m.
Mr Johnson said he did not anticipate the extra asylum seekers costing much more and said it was wrong to portray the move as a “terrible detriment to Croydon”.
He said: “We were expecting between five and seven extra people a week but there has only been three.”
Mr Pelling said he would be going back to the minister to ask for the funding shortfall to be met by the Government.
He said: “Croydon people should not have to carry the burden for the whole nation if this decision is ‘in the national interest.’”
More than 23,000 people applied for asylum in 2008 according to Government figures, with each application taking an average of 11 months to process.
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