The Home Office has agreed in principle to reimburse the council for the costs of looking after asylum seekers because asylum is a national issue.
But Kent claims that at the start of the financial year, 14.8m remained outstanding from the Home Office for 2002/03 and 2003/04. A 3.6m budget shortfall is predicted for this year, the majority covering the costs of looking after nearly 800 unaccompanied minors.
One option the council is considering to save money is dismantling the specialist unit that makes sure children who claim to have relatives in other parts of the country are not being trafficked and will be cared for.
Caroline Highwood, assistant director (resources) for Kent social services, said this would be "risky" because it would mean losing expertise based in the council's kinship assessment team.
Going against the Hillingdon judgment, which compels local authorities to look after unaccompanied minors, is another option under consideration.
This would mean that asylum-seeking children would receive lower levels of support.
"My advice to council cabinet members was that they couldn't do this as it's too risky to individual children," said Highwood.
Performance in keeping looked-after children reviews up to date is also poor in the asylum unit compared to the rest of the social services department because staff recruitment has been put on hold due to the lack of money.
A spokesman for the Home Office said it was working with the council to resolve the claim of outstanding money.
"An interim 3.2m has been agreed, bringing the total amount to 10.3m. We hope to resolve the issue in the near future, consistent with the commitment made by Beverley Hughes that the money would be paid, provided Kent produced evidence that funds were outstanding," he added.
Kent is also calling on the Home Office to address large discrepancies in the amount of money local authorities can claim from the National Asylum Support Service.
A Freedom of Information Act request shows that in 2004/05, Kent could claim 285.99 for a large asylum family each week. The average rate in the South East is 424.50, while Hertfordshire has the highest rate at 665.46.
