Councils will receive £114 for each young refugee every day they are in their care, which amounts to around £41,600 per year per child. Rates are currently paid at £71, £91 and £95 a day.
The Home Office says this increase in funding will total more than £30 million per year.
Councils spent more than £152 million on unaccompanied asylum-seeking children in 2017/18 – an increase of 95 per cent on the £77 million spent in 2014/15.
The number of asylum-seeking children and young people in care in England rose from 2,760 in 2014/15 to 4,480 in 2017/18. Councils have also seen an increase of more than 50 per cent in two years in unaccompanied children leaving care when they turn 18 but remaining their responsibility (up from 4,660 to 7,130).
Cllr David Simmonds, Chairman of the LGA’s Asylum, Migration and Refugee Task Group, said: “We are pleased that the Government has listened to councils by announcing new funding to help tackle some of this rising cost pressure and to help meet joint commitments to support children starting a new life in the UK.
“With the vast majority of refugee children aged 16 or 17, this change in funding needs to be followed through so that care leaving costs, which are equal to or greater than those of non-refugee children, are fully funded, as this remains the main barrier to councils taking on responsibility for ever-growing numbers.
“Councils are already under massive financial pressure supporting children in care, with children’s services in England facing a £3.1 billion funding gap by 2025. It is vital the Government uses the Spending Review both to plug this gap and to fully fund councils’ support of unaccompanied children, young people and families.”