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The much criticised voucher scheme for asylum seekers will be phased out before next September, home secretary David Blunkett said in a statement to the House of Commons, writes Lauren Revans.

Outlining the government’s long-overdue "fundamental overhaul" of asylum policies, Blunkett said the voucher scheme and system of dispersing asylum seekers into local authority accommodation would be replaced by a national network of induction, accommodation and removal centres, and the introduction of ID smart cards for all asylum seekers.

The smart cards, to be phased in from January, are intended to combat fraud and will include the owner’s photographic and fingerprint details.

Induction centres will accommodate new applicants for two to 10 days, enabling screening and health checks, and will remove the need for widespread emergency bed and breakfast accommodation being used to house asylum applicants when they first arrive in the country.

Subject to successful pilots, accommodation centres will then house asylum seekers, offering full board, education, and health facilities, and thereby removing the need for vouchers. Those refusing accommodation centre places will not be eligible for any further support.

Removal houses will accommodate those who are about to be removed from the country, and will see an end to the use of mainstream prisons for this purpose.

Blunkett told Commons: "The current voucher and dispersal system is too slow, vulnerable to fraud and felt to be unfair by both asylum seekers and local communities. That is why I will ensure that the voucher system will be superceded by early autumn of next year by more robust but less socially divisive alternatives."