Children’s charities warned that there are so few places available in homes that vulnerable young people are being sent to the first place that becomes available.
Robert Halfon, chair of the Education Committee, which is carrying out a review into childrens homes, said figures suggest that children in care who move schools in Years 10 and 11 scored five grades lower in their GCSEs than those who do not.
Mark Russell, head of The Children’s Society, said the system fails too many and works in favour of the institutions providing care instead.
He added there are now 34 per cent more children in care than 12 years ago, but funding has dropped.
National Leaving Care Benchmarking Forum’s Hannah McCowen said: “At the moment young people are just placed where there’s a place.”
Less than one-third of local authorities have access to enough residential homes for those aged 14-15, according to the National Audit Office.