The fostering system is failing thousands of vulnerable children who end up in jail and lacking basic qualifications, a report has warned.

The number of youngsters in placements has risen 16% since 2006 to more than 48,000, putting carers under huge strain.
Only a third of youngsters in the system achieve basic levels in maths and English, while more than a quarter of adults serving prison sentences previously spent time in care.

The study from think-tank Policy Exchange says the problems are costing society far more than the taxpayer's annual £1.2 billion spend on fostering services.

It does not support turning fostering into a profession, but suggests that rather than allowances all carers should be paid a year-round fee based on their experience, with extra money for each week a child is placed with them.

A "top tier" of foster carers should also be created to deal with youngsters who have "particularly complex and challenging" needs, Policy Exchange said. They would be willing to give up work to look after children, and would receive formal salaries as a result.

Commissioning of foster care should be opened up so independent providers can bid, and decisions on placements should be taken on the basis of the child's requirements, rather than cost to the local authority.

The report urges the Government to introduce a statutory duty for local authorities to publish registers of how many youngsters they have placed, and how long they have to wait.

In areas where the system is failing, ministers should be willing to step in to sack the official in charge of fostering, or force the authority to use another provider.

Report co-author Matthew Oakley said: "The lack of a stable, loving family affects a child's future chances in life.

"We must have high aspirations of what the foster care system can deliver. We desperately need to reform the current foster care system to give some of the most vulnerable children an opportunity that most of us take for granted.

"We can start by overhauling a system that can put cost considerations before a child's needs and does not encourage enough families to become carers.

"Our report shows that the outcomes of children in foster care are appalling and that foster carers are frustrated by poor support from social workers.

"Getting more and better quality carers into the system is essential. Improving the system now will pay huge dividends in the future.
"It is also essential that local authorities are held to account.

"They must use independent providers where this is in the child's best interest and failing local authorities should have their role in fostering taken away from them by the Secretary of State."

Tory MP Edward Timpson, chairman of the All Party Adoption and Fostering Group, said: "Through no fault of their own, the early life experiences of children in care, often dominated by neglect and abuse, make them amongst the most vulnerable in our society.

"With fostering arguably higher on the political agenda and in the public's mind than ever before, this opportunity to make fostering the best it can be cannot afford to be missed."