G4S and Serco have been criticised by the government’s spending watchdog for failing to provide adequate housing to vulnerable asylum seekers.

The National Audit Office has revealed that the government will seek to recover £3million and £4 million G4S and Serco respectively in the form of rebates.

Both outsourcing companies have been involved in providing services to Compass, a outsourced system set out by the home secretary to provide housing to asylum seekers.

A G4S spokesperson said in response to the report released this Friday: "We agree with all recommendations made and many of these have already been implemented as part of our on-going commitment to service improvement."