Julian Le Grand's comments come as Alan Johnson, the Education Secretary, this week used his speech to Labour's conference in Manchester to announce a new pound;2,000 bursary to help looked-after children attend university.
The Government will also pay an extra pound;100 into a young person's trust fund for every year they are in care - money which they can spend when they reach age 18.
Writing in today's TES, Professor Le Grand, of the London School of Economics' centre for analysis of social exclusion, says that targets are damaging the achievement of children in care because they encourage schools to ignore low achievers.
On Monday, Gordon Brown admitted that children in care had been one of the Government's "greatest failures of social policy".
In his speech Mr Johnson, echoed the Chancellor, saying: "No one suffers greater disadvantage in our education system than children in care. They are five times less likely to pass GCSEs and 25 times more likely to wind up in prison. Some of these children escape terrible abuse and neglect in their own family only to experience the chill of indifference of their proxy parent, the state.
"Instead of bringing them up, we let them down, bouncing them from one location to the next, dumping them in the worst schools and forcing them to fend for themselves from the tender age of 16. Next month we will publish wide ranging proposals to tip the scales of justice in favour of children in care making the state a good parent."
Good parenting and school choice for looked after children by Julian Le Grand and David Chater is available from www.smf.co.uk
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