He is particularly worried about the scandal of some private firms contracted to the dispersal scheme exploiting asylum-seekers by providing slum housing. Although Mr Blunkett insists he will not bow to calls to scrap the dispersal process, he has triggered an urgent review of the way it works, led by a senior civil servant.
As part of a wider strategy, asylum-seekers will be urged to do voluntary work in order to reduce hostility from local communities. Mr Blunkett is keen that they be seen to be giving something back to society with more 'purposeful activity', such as helping clean up rundown estates.
The government will face further criticism this week over child refugees when the Refugee Council and Save the Children publish a report highlighting the plight of children separated from their parents.
GLASGOW COUNCIL IGNORED THREAT OF RACE VIOLENCE ON ESTATE
Just weeks before the murder of a Kurdish asylum-seeker at Sighthill, Glasgow City Council was warned by a delegation of community workers and architects that serious outbreaks of racial violence were inevitable, reported The Independent on Sunday (p8).
Despite being urged to introduce cheap, quick-fix measures to lessen the likelihood of attacks, the council ignored the advice, citing lack of funds. Through the home office's dispersal scheme, the council is receiving£105m over five years for housing asylum-seekers.
'We urged them to spend money on building a community centre, the one thing that the asylum-sekers wanted above all else', said architect Michael MacAuley.
A council spokesman said 'the idea that you can defuse racial tension by building a community centre is simplistic'. Such a move, he said, would only have heightened tensions between ethnic minorities and the indigenous population, who already say that asylum-seekers get preferential treatment.
But community leaders are convinced a community centre could have relieved tensions.
The delegation, in June, was delivering to the council the results of a 12-month study by Strathclyde University architecture department into living conditions at Sighthill. Ethnic minorities make up about 68% of the population on the estate.