Education must be given a higher priority in the Government's planned reforms of the criminal justice system, says an Audit Commission report.
Young offenders are dogged by educational problems, says the local government watchdog -which found that almost two-thirds of school-aged offenders had been excluded or had been frequent truants.
One third of supervision plans drawn up by the courts for young offenders do not take account of their educational needs.
The report urges schools to co-operate with agencies such as the police and social services. It also recommends that performance indicators should demonstrate how well they serve less-academic pupils. Details of exclusions, absenteeism and the amount of time children spend in some kind of tuition could complement the records of academic achievement.
The report is an update of the commission's 1996 paper, Misspent Youth, which informed much of Labour's thinking on reforming youth justice. It highlighted waste, inefficiency, excessive delays in prosecution, insufficient time and effort spent on preventing young people offending and poor agency co-ordination.
Judy Renshaw, author of the update, said the original study underestimated the serious educational problems of young offenders.
Two-thirds of those on supervision orders - the main type of community sentence for young offenders - were unemployed and not in training or education when they were sentenced.
Education does play a greater part in the "Caution-plus" programmes, a warning system which will be given new emphasis in the Crime and Disorder Bill (expected to become law later in the summer).
Yet only 2 per cent of offenders are given this type of sentence - a caution which also requires some additional action by the offender such as working on their behaviour or tackling a drug problem.
Young offender teams set up by the new legislation, will include teachers or education officers to help tackle offenders' problems.
Paul Cavadino of the National Association for the Care and Resettlement of Offenders, praised the report, adding: "I find it astonishing that a third of supervision orders failed to address children's educational needs, especially as there is strong evidence that offending is linked to underachievement and exclusion."
Last month a NACRO report called for the Government to be tougher on the causes of crime - with schools playing a crucial role. It also highlighted the patchy nature of good practice in tackling offending behaviour around the country, which is reflected in the commission's report.
"Misspent Youth '98, The challenge for youth justice," freephone 0800 502030, price pound;20.