The Government has quietly cut money to house and educate orphan child refugees living here

The little-known 'UASC payments' have been sharply reduced

A child sits at a temporary holding camp for refugees close to the Serbian border in Roszke, Hungary (AP)

The Government is quietly cutting payments to house, educate, and look after orphaned and separated child refugees living in Britain, it has emerged.

The cash, spent by councils to look after unaccompanied asylum seeker children, is used to provide healthcare, housing and education.

But new figures made public by councils show a sharp reduction in the little-known “UASC payments”, leaving many local authorities with multi-million pound shortfalls.

Young children under 16 have had their daily funding cut from £137 to £114, a £23 fall, while older children have seen their rate cut to £91.

The cut will mainly affect children living in so-called “gateway” local authorities like Kent, Hillingdon and Croydon which look after the most children because of their proximity to transport links like airports and ferry terminals.

“It is a huge cut, not just a little bit. It is completely unacceptable,” Tony Newman, Croydon council’s leader, told the Croydon Guardian newspaper.

“Many people in Croydon want to help and that is great - the community feels very strongly - but our job as a council is to make sure that the funding is in place for those in need and there is not more pressure on local people in terms of that funding. We are calling on Government to do the right thing."

The funding cuts were made before the refugee crisis reached its current state but have not been reversed as the number of refugees increases.

Steve Reed, Labour’s shadow local government minister, described the funding reduction as “dreadful”.

“Child refugees orphaned or separated from their parents are arriving in Britain in unprecedented numbers because of the current crisis, and we should rightly do what we can to help.

“The government quietly slashed council funding for child refugees before this summer’s crisis, and now the situation has changed they refuse to do anything. This dreadful decision will have a huge impact on our councils, but more importantly, the children we support.”

Mr Reed raised the issue in Parliament this week. Home Office minister Mark Francois indicated that his department was aware of the funding shortfall.

The UK has taken a limited number of refugees, committing to only 4,000 a year for the next five years, and opting out an EU scheme to help re-house refugees already living in overburdened European countries.

This number compares to a commitment by Germany to take around half a million refugees a year for the next few years.

The Government this week appointed a new dedicated Minister for Refugees to oversee its response to the crisis.

Home Secretary Theresa May said on Wednesday that the first Syrian refugees taken in under a resettlement scheme would arrive in the UK "in the coming days".