Paul Dolton’s traumatic journey through the care system began when he was 5 years old. Abandoned by a drug-addict mother, he can just remember that he thought moving in with foster carers was not such a big deal.

How wrong he was. Over the next eight years Paul went though more than ten different placements. By 13 he was, as he puts it, “completely out of control”. At one placement, he kicked in doors, smashed up his bedroom and hit his foster mother. In one children’s home, he saw ruthless and relentless bullying.

“I was an angry little boy wanting to take it out on anyone I could,” he recalls. “I had my whole life taken off me, just like that. Everything I knew. So I refused to let anybody else in.”

After several brushes with the law, he believed he was heading for youth custody and prison. A quarter of boys aged 15 to 18 in custody and half of 15 to 18-year-old girls in custody reported being in care at some point.

Experiences such as Paul’s are making many question whether traditional fostering — the dominant form of care in Britain by far — is right for the large number of very vulnerable and challenging children in the system, and whether they need more professional help delivered by trained staff in residential homes.

Figures this week show the yawning gap between the educational achievements of children in care and those of children generally. Last year 46 per cent of 11-year-olds who had been in care for 12 months or more achieved at least level 4 or above in English, compared with 80 per cent in the general population.

An even more stark illustration that the system is failing the most vulnerable is that only 15 per cent of children in care got five A*-C grades at GCSE in 2009, compared with 70 per cent in the general population. Now, in a big shift of emphasis, local authorities will no longer be able to rely so heavily on traditional foster care.

A new legal duty will require councils to provide a sufficient and diverse range of care places, from a good supply of traditional foster care to good residential care of the kind on offer in continental Europe, through to new forms of therapeutic foster care now being piloted. From next April local authorities will also face the threat of legal action from children if they fail to provide it.

Official statistics show about 6,000 of the 60,000 children in care move three or more times a year between different foster carers as carers try and fail to cope with their needs. About 1,500 have more than 20 moves a year.

Many children now coming into care are very disturbed, angry and even violent, having endured years of neglect or worse as social workers attempted to keep the family together. Increased levels of drug addiction and alcohol abuse among parents, often combined with mental health problems, lead to many of the complex emotional problems the children have.

The majority of the 60,000 children in care live with foster parents and the number of residential places has fallen to 12,000 in recent years. Twenty years ago two thirds of the 92,000 children in care were in residential homes.

Martin Narey, chief executive of Barnardo’s, believes the determination of local authorities to use traditional foster care has resulted in so many children being shuffled round the system. “I would estimate there are probably about 10 per cent of children with foster carers who need a different form of care. For those children we have to provide the loving, small-scale, ambitious high-quality residential care with, most of all, the stability that children in care prize so much, and which other European countries appear to provide without much difficulty.”

Baroness Morgan of Drefelin, the Children’s Minister, who helped to steer the new legal duty on local authorities through Parliament, said: “What suits a teenager in care and a two-year-old is going to be very different. Clearly foster care works for many, many children and, where it can, great. But local authorities need to think carefully about this new legal duty and make sure there is a range of provision.”

The number of children being taken into care has jumped by 30 per cent since the Baby P tragedy. Whereas it costs about £30,000 for a child to be in foster care each year, a residential placement costs about £160,000.

Residential care saved Paul. After a string of unsuccessful foster parents and disastrous stints in children’s homes, he was moved to a therapeutic residential unit for young people run by Bryn Melyn Care. After almost six years, Paul left with seven GCSES, all Bs and Cs. He is now at college and hopes to become a network technician.

He still feels a bond to the staff who took him in when he was out of control. “When I walk into my old children’s home, it’s like going back to your mum and dad’s house.” he says.