The new arrangements in the Immigration and Asylum Act 1999, which involve sending asylum seekers to regional consortia to take pressure off the overstretched south-east, are due to take effect from 1 April.
But a Home Office tendering exercise seeking private sector providers for half the 4,000 places needed for dispersal had a disappointing response, the Local Government Association said.
LGA asylum seekers team leader Mike Boyle said: 'Have [the Home Office] got their own systems in place? Have they got the voluntary sector support needed in place? Have they got enough accommodation? We have concerns about all three.'
The most likely scenario was partial dispersal of asylum seekers. Mr Boyle said the LGA would support this but 'we would want assurances that any costs incurred for councils as a result would be met in full'.
The Home Office said it would announce shortly how far it had got on preparations for