My dog killed a kitten?

I have a rescue dog, Had it for nearly two years now. We ended up with it as originally we fostered it for a friend who runs a rescue centre till it could be sent to the RSPCA to be re-homed. The dog hates being confined anywhere, which is why we took it. It was being kept in a centre and was driving them crazy barking all the time. Well, the dog went to the rspca who kept it confined (they were supposed to be sending to a foster home) which made it play up and they said it cant be re-homed and must be put down. We told them we would take it back rather than put it down, and so have had it since. The dog is a bit of an escape artist, jumps high fences, slips his lead/collar/harness and runs amok in general. It dislikes other dos, HATES cats (we have some) and if it sees any animal smaller than itself turns into a bully.It escaped off its coller and chain last night (during the day it stays out back on a chain as it escapes otherwise) and ran to our neighbors farm (over the road) my hubby went after it, went into their yard and noticed a small kennel with kittens. He closed the door, but left it open a bit in case the mother came back. Our dog ran past, saw the kittens pulled them all out shook, 2 of them, then killed the 3rd. My hubby tried to get him off the kitten, but every-time he went near, the dog snapped at him. He eventually managed to get his lead on and dragged him off (too late for the poor kitten though). We are at our wits end now. We cant keep the dog indoors because of our cats plus young children, and the dogs hate being confined in a room. We cant confine this dog as it will escape (our other dog does not) and as we live in a farming community, if it goes near or harasses any other animals, it will probably end up shot. I think we should get shot asap, hubby wants to try and train the dog, but is busy on a farm and does not really have the time. Does anyone have any advice/suggestions? Thank you