The Home Office’s top civil servant Matthew Rycroft has already admitted the department is yet to meet its own target on compensation payouts for Windrush victims.
Priti Patel should be stripped of responsibility for the Windrush compensation scheme, MPs said after a “litany of flaws” was identified in the way her department operates.
The cross-party Commons Home Affairs Committee said the scheme should be transferred to an independent organisation to increase trust and encourage more applications.
The MPs said the design of the scheme contained the same “bureaucratic insensitivities” that led to the Windrush scandal in the first place, which was a “damning indictment of the Home Office”.
The scheme was set up to compensate members of the Windrush generation who were wrongly denied their lawful immigration status as a result of Home Office policies.
But the MPs found that, as of the end of September, only 20.1% of the initially estimated 15,000 eligible claimants had applied, just 5.8% had received any payment and 23 individuals had died without receiving compensation.
Labour had called for a new independent body to handle the scheme on Windrush Day, June 22, and slammed it as an “an offensive mess”.
The committee said: “The treatment of the Windrush generation by successive governments and the Home Office was truly shameful.
“No amount of compensation could ever repay the fear, the humiliation and the hurt that was caused both to individuals and to communities affected.”
It was “deeply troubling” that the Home Office’s handling of claims “has repeated the same mistakes which led to the Windrush scandal in the first place”.
The committee’s Labour chairwoman Yvette Cooper said it was “staggering, given the failures of the Windrush scandal, that the Home Office has allowed some of the same problems to affect the Windrush Compensation Scheme too”.
“It has been four years since the Windrush scandal emerged and it is truly shocking how few people have received any compensation for the hardship they endured at the hands of the Home Office,” she added.
“It is particularly distressing that 23 individuals have died without receiving any compensation.
“Urgent action is needed to get compensation to those who have been so badly wronged.”
Nick Thomas-Symonds MP, Labour’s Shadow Home Secretary, said: “The Tories have continually failed to act on this issue even when faced with repeated warnings that their own system is not working.
“Labour welcomes that the Home Affairs Select Committee’s Report came to the same conclusion. The Windrush Compensation Scheme is an offensive mess that is heaping insult upon injustice.”
Earlier this year it had been noted the Home Office only deployed six caseworkers to deal with the compensation scheme when it was launched, instead of hiring 125 case workers as advised by the Public Accounts Committee.
The lack of staff has caused “fundamental problems” in the schemes design leaving these issues “coming home to roost”.
A Home Office spokesman said: “The Home Secretary has been resolute in her determination to put right the wrongs suffered by all those affected by the Windrush scandal.”