The state of some asylum accommodation provided by Home Office contractors throughout the UK has been branded “disgraceful” by MPs.

The House of Commons home affairs select committee called for a major overhaul of the system after hearing evidence of families living with vermin, unclean conditions and inadequate support for vulnerable people.

A damning report by the committee, published today, describes the state of the properties in which asylum seekers were housed under the COMPASS contracts as “terrible” and “disgraceful” – with infestations of mice, rats and bedbugs the second biggest source of complaint of people living in dispersed accommodation.

There was also evidence of families being unable to put their children down on dirty carpet and rotten sofas and of women in the late stages of pregnancy being placed in rooms up several flights of stairs or being made to share a bedroom.

The committee chair, Yvette Cooper, said that even where the accommodation and support were of a good standard, asylum housing was still far too concentrated in the most deprived areas.

The Home Office contracts to provide housing for dispersed asylum seekers were awarded in 2012 to three providers, G4S, Serco and Clearsprings Ready Homes.

Orchard & Shipman (Glasgow) Ltd managed the contract in Scotland on Serco’s behalf before relinquishing control last year following allegations that asylum seekers in Glasgow were locked out of their homes and being bullied by staff.

But the companies told the MPs they were now housing more people than the contracts allowed funding for because of growing delays in Home Office asylum processing and increasing numbers of applications.

Now MPs have been told that contractors are housing more people than they were funded for because of the contract design, growing delays in Home Office asylum processing and higher applications.

The committee also slammed the inspection, compliance and complaints regimes as “inadequate”.

Ms Cooper said: “The state of accommodation for some asylum seekers and refugees in this country is a disgrace. We have come across too many examples of vulnerable people in unsafe accommodation, for example children living with infestations of mice, rats or bed bugs, lack of healthcare for pregnant women, or inadequate support for victims of rape and torture. No one should be living in conditions like that.”

She said it was unfair that those local communities that had signed up to take asylum seekers were housing more and more people while many local authorities in more affluent areas were doing nothing.

She added: “The current contract system is badly designed and puts local authorities off from signing up. Ministers should learn from the success of the Syrian vulnerable persons resettlement programme which has given local authorities far more control and has also got far more local authorities involved. Similar reforms are needed for asylum seekers.”

The report has been was welcomed by the Scottish Refugee Council which has called for the COMPASS contracts to be replaced with a completely new system once the present contracts expire in 2019.

Contracts were due to run out this year, but the UK government announced it would extend them by two years, despite the poor track record that led to this inquiry.

The National Audit Office published a critical report on the contracts back in 2014, and the many problems with the services have continued.

Scottish Refugee Council policy officer, Graham O’Neill, said: “This report is a damning indictment and the Committee is right to describe this service as a disgrace – it has failed.

“This is a public service for people who really need it, who have come from trauma including war, torture, sexual violence or the loss of family members.

“It is desperately important that these people have a safe space to recover from what they have gone through.

“But the current model is not fit for purpose. The inspection regime does not work, and journalists and charities have been forced to do the job of the state in uncovering appalling housing conditions and treatment of vulnerable people.”

Scottish Refugee Council calls for future asylum housing to follow a person-centred approach, taking into account the complex and serious needs of people displaced from their homes and who have often undergone terrible journeys.

As the report says: “The wellbeing of the individual, particularly those who are most vulnerable, has to be at the heart of a reformed asylum system.”

The report also calls for devolved countries and local authorities to have far more input in decision making so they can plan and coordinate dispersal to best meet the needs of people seeking asylum.

Mr O’Neill added: “Scottish Refugee Council supports this call – we think there needs to be an agreement between UK and devolved governments to decentralise the dispersal and housing of people seeking asylum – and to make the service accountable.

“That will help restore confidence in the system amongst local and devolved institutions, who were left out in the cold by the current contracts.

“These contracts were supposed to at least be money-savers – but in fact the true cost of these contracts is unclear – many expenses have unfairly been displaced to local authorities and services.

“We look forward to the National Audit Office revisiting the contracts and providing a realistic, transparent assessment of the costs involved so that this service may be sufficiently resourced.”

A Home Office spokesperson said it was committed to providing safe and secure accommodation while asylum applications were considered.

“We work closely with our contractors to ensure they provide accommodation that is safe, habitable, fit for purpose and adequately equipped and we conduct regular inspections to check that this is the case. We have also made significant improvements to the operation of the contracts including increasing the number of dispersal areas by more than a third,” they said.

“We will consider the committee’s recommendations and respond in full shortly.”

Last week the Scottish Parliament’s equalities and human rights committee said it is to investigate ways in which Scottish public services can help asylum seekers facing destitution.

Responding to the report, equalities secretary Angela Constance said: “Today’s report on asylum accommodation across the UK is deeply concerning, and is the latest in a long list of claims about quality of accommodation provided to asylum seekers.

“Urgent action is now needed by the Home Office. As a matter reserved to the UK Government, they must ensure that asylum seekers, many of whom have endured great hardship and are particularly vulnerable, are treated with dignity and respect at all stages of the asylum process, including access to good quality, safe and secure housing.

“We are committed to ensuring asylum seekers and refugees find protection, safety and security in Scotland, and we will continue to work closely with local authorities and COSLA to provide education, health and welfare support to those who arrive in this country.

“I will await the Home Office response with interest, and am ready to be fully involved in discussions on how the recommendations in the report can be taken forward in Scotland.”