A catalogue of errors has left County Hall with a 1.5m bill for asylum-seekers, writes Reg Little.

An inquiry has been ordered to establish how Oxfordshire County Council bungled its application to the Home Office for financial help.

It now appears that the county will pay dearly for a series of elementary form-filling mistakes and failure to keep proper records of the 1,300 asylum-seekers housed in the county.

The inquiry will examine claims that asylum-seekers were counted twice in some cases "where slight variations in the spelling of names had not been picked up." This resulted in Social Services paying rent twice for some families. Then, when Oxfordshire went to the Government for help, it seriously underestimated the number of families it was paying to house, often in expensive bed and breakfast hostels.

Now up to 1m may have to be taken from the council's budget to cover the outstanding cost. Labour county councillor John Power today accused the social services department of "gross mismanagement".

He said: "This is not down to the Government. This has to be put down to incompetence. People forgot to fill in forms."

The inquiry was hastily ordered when the Home Office rejected Oxfordshire's case for additional payments based on "exceptional need". The council now admits there was "significant discrepancy in the actual numbers of families known to the department and those reported on the grant claim form.

A preliminary report by Social Services assistant treasurer Sean Collins to councillors spelt out the chaos as hundreds of thousands of pounds was paid out for bed and breakfast. It says significant weaknesses were found in a system which relied on "the correct identification and spelling of the asylum-seekers' names".

Liberal Democrat leader Cllr Margaret Godden said the county would reapply to the Government and it hoped to get back some of the shortfall.

But she added: "We are likely to be left to pick up between 500,000 and 1m from our balances. I am afraid it has become a serious drain on our finances."