From January, the pound;650,000 used to fund the council's "Re-integration and education otherwise than at school" service in the Ryedale, Scarborough and Whitby areas will be devolved to the 13 local secondary schools.
They will be expected to collaborate and make their own arrangements for persistent truants, pupils likely to be excluded and others who currently struggle to find school places. The authority says it expects the plan to be replicated in other parts of the county by 2007. It hopes to win pathfinder status for the scheme, which it says is in line with the Government's special educational needs strategies.
It will monitor the schools' plans and is encouraging them to take on the staff being made redundant. But Mike Rought-Brookes, National Union of Teachers' North Yorkshire secretary, said: "It is quite likely that all of these people will be out of work in 12 months. We are also worried about the children. Although we agree with inclusiveness, it has to be done properly and there is no evidence yet of a plan being in place."