Wales’s most vulnerable young people stand to lose out on thousands of pounds because some local authorities have not invested in child trust fund accounts for the children in their care.

Looked-after children could be denied crucial funding for education and training because many councils have not yet made a commitment to add extra money to the long-term savings account - even though the Assembly government has pledged the cash to cover the contributions.

The child trust fund, introduced by the Westminster government for all children born on or after September 1 2002, has been available since April 2005.

Eligible looked-after children should each get pound;500 invested for them, and the Assembly government has promised to cover the cost of an extra Pounds 50 a year for each child’s fund.

But TES Cymru has discovered that two local authorities - Gwynedd and Bridgend -have not yet opened accounts for the children in their care, losing 12 months’ worth of interest. Ceredigion said it is in the process of setting up the funds and intends to make additional contributions when it does.

Just 13 of Wales’s 22 local authorities responded to TES Cymru’s request for information about child trust funds for the children in their care. And only three of those - Blaenau Gwent, Swansea and Carmarthenshire - have given a firm commitment to contributing extra money to each account.

Deborah Jones, director of Voices from Care Cymru, which represents all looked-after children, said she was shocked that so few commitments had been made when the money was on offer.

“This is a straightforward issue of discrimination against some of Wales’s most vulnerable children,” she said.

“Local authorities should be putting money directly into these accounts so that children leaving care, who need it more than most, get the money that is owed to them to set up home and continue with their education.”

A spokesperson for the Welsh Local Government Association said every local authority should have arrangements in place to ensure that eligible children have access to a child trust fund account.

It is also encouraging authorities to add pound;50 a year to each account, which will be reimbursed by the Assembly government. The National Assembly recently passed a motion to “encourage” all local authorities in Wales to top-up the accounts by pound;50 a year, but there was not enough support to make it a requirement. This puts looked-after children at a disadvantage to their peers, according to Leane Wood, Plaid Cymru’s shadow social justice minister.

“We must put a duty on local authorities to provide child trust funds for looked-after children,” she said.

“It is vital that every child looked after by a local authority has the best start in life and these funds should be targeted at those children. We cannot let children in this position be put at a further disadvantage.”

Recent studies have shown that if the full pound;500 was invested, and grew at 7 per cent a year, the child trust fund would be worth pound;1,410 after 18 years. But the idea is that additional contributions are made by family members, or - in the case of children in care - by their corporate parents. These then bump up the fund to give young people a real head start when they reach 18.