She told MPs the UK Border Force would become a separate law-enforcement body with its own distinctive “ethos”.
Mrs May said officials had abandoned rules and gone further than ministers had recommended in relaxing checks.
Wiltshire Chief Constable Brian Moore will lead the new border force.
His predecessor, Brodie Clark, was suspended and then resigned, saying his position was untenable, after claims he had relaxed checks beyond what had been authorised by ministers.
The UK Border Agency was set up in 2008 following Labour Home Secretary John Reid’s 2006 declaration that the Home Office’s immigration directorate was “not fit for purpose”.
It is responsible for securing the UK border at air, rail and sea ports and migration controls, such as the issuing of visas.
Its work was previously carried out by the Border and Immigration Agency, HM Revenue and Customs at the border and the Foreign Office.
Under the new arrangements, immigration policy work will be separated from operational duties.
The UK Border Force, the section of the UKBA that manages entry to the UK will become a separate entity. In addition, from next year the new National Crime Agency will be charged with improving intelligence capability at borders and investigating serious and organised border crime.
Mrs May made a statement to MPs on oan investigation into the agency carried out by John Vine, the independent chief inspector of the UKBA.
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She said officials had exceeded their remit on several occasions, under the current government and its Labour predecessor.
Among the findings:
Security checks had been suspended regularly and applied inconsistently since at least 2007
Checks against the Home Office Warnings Index were not carried out on about 500,000 European Economic Area nationals travelling to the UK on Eurostar services from France
An operation was carried out at Heathrow Airport in which students from supposedly low-risk countries were allowed to enter the UK even when they did not have the necessary entry clearance
Secure ID checks were suspended 482 times between June 2010 and November 2011, including 463 times at Heathrow
Between January and June 2011, prior to the introduction of a pilot which relaxed border checks in specific situations, “the biometric chip reading facility had been deactivated on 14,812 occasions at a number of ports”
Mrs May said: “The Vine report reveals a Border Force that suspended important checks without permission; that spent millions on new technologies but chose not to use them; that was led by managers who did not communicate with their staff; and that sent reports to ministers that were inaccurate, unbalanced and excluded key information.
“The Vine report makes a series of recommendations about how to improve the operation at the border, and I accept them all.”
Mrs May added: “I do not believe the answer to the very significant problems exposed in the Vine Report is just a series of management changes.
“The Border Force needs a whole new management culture. There is no getting away from the fact that UKBA, of which the Border Force is part, has been a troubled organisation since it was founded in 2008.
“From foreign national prisoners to the asylum backlog to the removal of illegal immigrants, it has reacted to a series of problems instead of positively managing its responsibilities.”
Shadow home secretary Yvette Cooper: “Language from the home secretary’s own private office was not clear”
On the splitting up of UKBA, Mrs May said that “the extent of the transformational change required – in the agency’s caseworking functions and in the Border Force – is too great for one organisation”.
The Border Force would “become a separate operational command, with its own ethos of law enforcement, led by its own director general, and accountable directly to ministers”, she added.
For Labour, shadow home secretary Yvette Cooper told Mrs May: “It is time for you to stop hiding and to take responsibility for things that have happened on your watch, for the unclear instructions from your office, for the policy decision to downgrade border controls, for the failure to monitor and check what was going on, and the for the failure to take responsibility now.
“This mess got worse and escalated on your watch, every month that went by. Unless you accept responsibility for it, you will fail to sort it out and you will also fail to reassure us that you can cope with future fiascos, and that you as home secretary can keep our borders secure.”
The UK Border Agency will be split up at the beginning of next month.
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