The National Audit Office which oversees the activities of the United Kingdom’s Border Agency also came out with reports that immigration loopholes and eventual flawed crackdown may have allowed up to 50,000 bogus students into Britain.
It has also been suggested that around one in six of student visas granted went to applicants whose intentions were to take up jobs.
It found that predictable failings in Labour’s points-based system meant the number of student visas issued went up by a third in its first year.
The public spending watchdog however criticised the UK Border Agency for failing to remove from the country the estimated 160,000 migrants whose visas have expired and who litter the country.
The latest report has added to the wave of criticisms of the UKBA, sinking more its dwindling reputation.
Last year it was disclosed that border checks were downgraded without ministers’ approval.
And a report last month revealed 500,000 passengers were allowed into Britain on Eurostar trains without checks against the database of known terrorists and criminals.
The current report on the students visa however exposes how Tier 4 of the points system, which covered higher and further education students from outside the EU, was introduced in 2009 despite major flaws.
It reveals only one third of colleges had been checked by immigration officials before they were allowed to accredit students. And officials were stripped of their powers to turn away suspected bogus students at the borders before proper checks on document applications were in place.
That meant they were often powerless to turn away students who they believed had no intention of studying and were simply here to work
In the first year of operating Tier 4, the number of student visas issued rose by a third from 235,615 to 313,320.
The report finds students whose visas have expired are regarded as a ‘low priority’ by the agency compared to illegal immigrants and failed asylum seekers.
As a result, very little action is taken to kick them out. Since 2009 just 2,700 students have been removed.
The report quotes UKBA figures showing around 159,000 people are thought to be in Britain despite their visas having expired, including tens of thousands of Tier 4 students.
To test how hard it was to find them, the NAO hired a private contractor which in just a week discovered addresses for nearly one in five of 800 individuals.
Labour MP Margaret Hodge, chairman of the Public Accounts Committee, said: ‘This is one of the most shocking reports of poor management leading to abuse that I have seen.
‘It is completely unacceptable that the programme was launched without key controls being in place.
‘The agency has done little to stop students overstaying their visas. And it is extremely worrying that the agency does not know how many people with expired student visas are still in the country.’
Former Border Agency chief Lin Homer, recently appointed to a senior role within HM Revenue and Customs, is likely to face a grilling by the committee in coming months.
The Home Office said it disputed the 40,000 to 50,000 figure.
Immigration Minister Damian Green added: ‘This government has introduced radical reforms in order to stamp out abuse and restore order to the uncontrolled student visa system we inherited.’