Out-of-area placements for looked-after children in Wales are to be reviewed as their contribution to council costs continues to increase.

Around 900 youngsters are placed outside their council area, many far from home and often without adequate care planning. Spending on looked-after children in Wales rose 63 per cent over the three years to 2004, to pound;106.7 million - and half of the increase was due to residential care placements, which account for just 7 per cent of all placements.

Assembly members voted last month in favour of strengthening the obligations on councils, local health boards and other agencies to ensure that decisions are made in the best interests of the child.

In future, placements must be provided as close as possible to the child’s home unless there is significant risk, be co-ordinated between agencies, and delivered by key workers.

In addition to the overhaul of placements, more responsibility will be placed on local authorities and other agencies to ensure that the health, well-being and educational needs of looked-after children are paramount when making decisions about their future.

Looked-after children will now be entitled to an annual health review by their GP. Health boards and local authorities will have to nominate designated staff to co-ordinate their health and education needs.

Meanwhile, councils have been told what their share will be of a new pound;1m pot of cash specifically for supporting the education of looked-after children - part of the Assembly government’s Raise (raising attainment and individual standards in education) fund.

The TES and TES Cymru have been highlighting the educational underachievement of children in care, in a bid to help raise standards. In Wales, more than three in five care-leavers left without a single qualification last year.

Conwy is to get a share of just under pound;31,000. Eilir Jones, education co-ordinator at the council, hopes to use some of the money to offer support to people like 16-year-old Anne who, after a life spent mostly in care, became a parent just a couple of months before her GCSEs.

When she found out she was pregnant she was transferred from mainstream school to a special unit for expectant mums and those who have had children.

There she was able to benefit from extra teaching support, as well as creche facilities if she needed them after the birth, in order to carry on with her education. She has just taken three GCSEs and has the chance to study from home from September.

Mr Jones said: “Anne was very eager to get back into education, but unless you have the right facilities for youngsters who find themselves in situations like hers, they are going to put their education on hold or not do it at all.”

Mr Jones also wants to provide extra resources to Conwy’s four pupil referral units, which offer tailored help for young people with behavioural or emotional problems. He said: “It would be easy to just throw money at extra teachers.

“But you need to think a bit more creatively to get these youngsters engaged in education.”

Jane Davidson, minister for education, lifelong learning and skills, said the grant would give the kind of educational support to looked-after children normally provided by parents.

“The Assembly government’s ambition is to ensure that all our young people, whatever their situation and circumstances, are afforded the best opportunities and support that our education and training system can provide,” she said.