The National Transfer Scheme was set up in July 2016 by government to relieve the pressure on so-called "gateway authorities", such as Kent County Council and Hillingdon Council, which were having to care for increasing numbers of unaccompanied asylum-seeking children.
It has now emerged that as of September 2017 around 90 councils had "opted-in" to the scheme - leaving 62 that had not, around 40 per cent.
It is the first time the scale of local authority involvement with the scheme has emerged, although some councils - including Nottinghamshire, Leicestershire, and Dorset, have previously said they either intended to quit, or were considering quitting the scheme due to financial pressure.
Under the scheme, each council that opts in is expected to take on unaccompanied asylum-seeking children up to a maximum level of 0.07 per cent of its overall child population.
A report by the Independent Chief Inspector of Borders and Immigration found that the scheme has "largely done what it set out to do", with 549 transfers being completed by 7 September 2017.
However, some regions took on far more unaccompanied children than others. Councils in the East of England took on the most (148), followed by the South West (87) and South East (86). those taking on the least were the West Midlands (38), the North East (23), and London, which took just four.
Stakeholders told inspectors that they regarded the scheme as a good idea in principle, but said it was not working effectively in practice, largely due to delays in transfers taking place.
The report states that the scheme's administration team aims to transfer children within five days. When the scheme launched, cases were being transferred within an average of eight days, but by November 2017 the average had become 30 days.
The report adds that concerns have been raised about the impact of delays and the risk that if a child remains in the "entry" area for a matter of months the likelihood of them going missing when they are told they are being transferred increases. Capacity in "receiving" local authorities was cited as a major factor in transfer delays.
"Stakeholders believed the Home Office failed to appreciate the range of demands on local authorities from asylum, migration and resettlement programmes, and had little understanding of local authorities' capacity to meet all of these demands," the report states.
Local authorities are currently able to claim £41,610 a year from the Home Office for unaccompanied children under 16 and £33,215 a year for unaccompanied children aged between 16 and 17, but many claim it does not cover the true cost of support.
As part of a safeguarding strategy for unaccompanied asylum-seeking children published in November, the government has pledged to review funding levels councils receive. The funding review is due to conclude by April.
In January the government said it would provide £20m of additional funding to be shared between local authorities supporting more than 10 asylum-seeking children.
Under the Immigration Act 2016, the government has the power to introduce a mandatory transfer scheme, but asylum policy officers at the Home Office told inspectors that this was not the preferred option.
The government's official response to the report states that an updated National Transfer Protocol, due to be published imminently, will provide guidance and good practice notes for social workers on how to make a decision on whether to refer the child to the transfer scheme and factors to be taken into account when assessing the child's best interests.