There are 11,000 asylum-seekers in Britain who have waited at least seven years to hear whether they can stay, a group of lawmakers said on Wednesday.
Some 29,000 asylum applications from 2007 and earlier have not been resolved by the Home Office, the parliament's Public Accounts Committee (PAC) said.
Of these, 11,000 have still not received an initial decision on their claim.
"The pressure is on, and the Home Office must take urgent steps to sort out this immigration mess," said PAC chair Margaret Hodge.
The Conservative government of Prime Minister David Cameron, under pressure over immigration in the run up to a general election next May, responded that it had taken over a "failing organisation" when it took power in 2010.
"The immigration system we inherited was totally dysfunctional with systematic abuse of family, work and student visas and an agency overseeing it all that was completely incapable of the task," said immigration and security minister James Brokenshire.
"Turning around years of mismanagement has taken time, but it is now well under way."
The UK Border Agency (UKBA) was shut down in March 2013, partly due to its struggle to deal with backlog cases.
Three directorates -- UK Visas and Immigration, Immigration Enforcement and Border Force -- have since taken over the job.
But the committee said that the department is already missing targets for processing claims and that a new backlog was forming, partly due to a mishandled cost-cutting drive that led to the departure of 120 experienced caseworkers.
The Refugee Council charity said the delays left damaged people "in limbo", unable to work and rebuild their lives.
In addition, currently over 175,000 people whose visa applications were rejected are listed as awaiting removal from Britain.
In 2012, a private firm discovered 50,000 on the "rejected" list could not be contacted.
Other problems included a cancelled IT project that wasted almost £1 billion ($1.6 billion, 1.3 billion euros) of taxpayers' money.
"The dramatic mismanagement of the Border Force has left an almighty mess for the Home Office to clear up, but the department appears to be making it worse," said Dia Chakravarty, political director of the TaxPayers' Alliance.
"These delays not only have a human cost, with asylum seekers forced to put their lives on hold for years on end, but it's clear from the report that botched IT projects and the length of these cases are costing taxpayers too."