The Home Office makes huge profits from immigrants. So where is the money going to?

As Theresa May's Government makes plans for Brexit, there are increasingly serious concerns about the economy if there is a hard Brexit and fewer migrants filling skilled work shortages.

Little attention has focused on how new immigration policies will be paid for as the costs of Brexit go up and extra funding harder to find. This might be because Theresa May has other plans for the money raised from immigration applications – and so starving the immigration system of much need cash.

Migrants pay increasingly high fees to apply for visas and citizenship – and most of this goes into the government's back pocket. Prices have soared in some cases by 25 per cent over the last year many times the inflation rate. It can cost ?2,297 to become a permanent resident and an additional ?1,282 for citizenship – and that's after passing a citizenship test that's more like a bad pub quiz, meeting five year residency requirements and no access to public funds. The Home Office has even started charging ?5.48 for emails.

According to their own data, the actual cost to the Home Office of making decisions is only about ?135 per application. This means the government is quite literally soaking migrants for a hefty profit of 900 per cent or more on many applications. And there is no sign that immigration fees will do anything but rise after Brexit. This cannot be right.

Not only are migrants paying more than necessary for their applications be processed – in a service regularly criticised for being unfit for purpose – but the money raised isn't being used to help address immigration-related issues where it could provide welcome relief. The Government has cut the number of border agents by several thousand despite receiving large sums in immigration application fees. Funding is available and not being used.

What's even worse is that part of these high fees was specifically earmarked to reduce migration-related impact. In 2009, Home Secretary Jacqui Smith launched a Migration Impacts Fund. This was a ?50 fee added to migration applications that went to a common pool distributed to local communities most affected by migration impact such as supplying extra nurses, teaching assistants and buses where required.

Within six months of coming to office, the Tory-led coalition scrapped the fund in 2010 – but kept the funding for different pet projects. The fee remains high, but we don't know where the extra funding goes except it isn't to reduce migration-related impact. This means millions is still being paid linked originally to a fund to reduce migration impact that has been diverted for over seven years. Communities affected by migration impact have lost out on much needed support – and migrants are left paying the bills for unrelated Tory pipedreams. A lose-lose situation.

This money could help May in enforcing migration controls she says that she wants. Her government is committed to reducing net migration – the numbers leaving or returning to Britain – to under 100,000. It is within her power to place heavy restrictions on visas for entrepreneurs, skilled professionals and students from outside the EU that could achieve her target without affecting a single EU citizen. Her failure to meet her government's net migration target is not the fault of the EU, but a political choice made in 10 Downing Street. Just like the decision to use migration fees to fund non-migration policies – undermining further the immigration system the Prime Minister promises to protect.

So when the Government claims there is no magical money tree, know that migrants are making the Home Office massive profits that the Government is diverting outside an immigration system where it could be put to better use. It's time we all challenged the government to explain the high fees, large profits and yet chronic underfunding in the immigration system. This isn't a problem caused by Brexit, Brussels or anybody else than poor decision made under this government. Let's get it fixed.

Thom Brooks is Dean of Durham Law School