MIKE knows all about leaving home. He has done it every year since he was three. From the day he was taken into care as a toddler to the day he left as a 16-year-old, Mike was in 19 different "homes". Where is he now? Homeless: he's 18 and living in a hostel for rough sleepers.

That struck Kathleen Marshall, Scotland's Commissioner for Children and Young People. "It's a real condemnation of corporate parenting," she said yesterday. "He left care at 16 and for six weeks was sleeping in the streets. It's absolutely astonishing."

Ms Marshall singled out Mike's story in her latest and perhaps most damning report: into when and how young people leave care.

Fully half of all children in care, she found, were effectively shoved out the door when they turned 16. Many ended up in places that were "inappropriate": one young person, the commissioner found, was put in the same B&B as a convicted murderer; another was beaten by an older woman in a homeless hostel; a third was nearly forced to share a room with a stranger.

Ms Marshall in her report worked out that more than one in 10 young people leaving care endured one or more episodes of homelessness. But she can't be sure: councils admit that they don't know what becomes of up to one-third of care-leavers. A lot of young people disappear off the radar," she said. "Local authorities just don't know where they are."

It wasn't supposed to be this way. Scotland's last executive brought in new policies designed to keep children in care longer and looked to encourage ways to make the transition from childhood to adulthood easier.

Policy changed, Ms Marshall found. Culture didn't. Why not? Essentially, senior sources have told The Herald, councils are simply squeezing older children out to make way for armies of new ones. Scotland now has more "looked-after children" - either in residential care or under supervision at home - than at any time since the peak of the Thatcher-era recession, in 1982. Scottish councils, as of March 31, 2007, were looking after 14,060 children, 8% more than a year before and 26% more than when devolved government took over in 1999.

Half of all looked-after children are "accommodated", either in homes or with foster parents or relatives. Last year, there were 7810 on the books of local authorities. That is up from 5741 in 2000. Sources believe a thousand of those extra children in residential and foster homes come from families broken by the ever-rising tide of drug abuse. Putting up children in homes costs a lot. Some residential schools cost more for a week than the Savoy Hotel.

"Unfortunately, young people leaving care have to compete for resources with other younger children who are in need or looked after," said Bernadette Docherty, president of the Association of Directors of Social Work (ADSW). "There are long-standing issues which still require to be addressed - growth in the number of children in need; underfunding of services and workforce issues."

Scotland's council social work departments have been given more money in recent years, but grant-aided expenditure from Holyrood hasn't kept up with demand. Some councils have simply raided budgets for vulnerable elderly people - as revealed in The Herald earlier this week - to make up some of the difference. Few have the kind of money needed to cope. The last Labour-led Scottish Executive gave councils £160m less for children's services than they needed to provide them, according to ADSW research carried out by Professor Arthur Midwinter, now an adviser to Labour leader Wendy Alexander.

The SNP government, meanwhile, has given councils more leeway on how they spend money.

Senior social work officers still feel stretched. "We are the ones left holding the baby - and the granny too," said Ms Docherty.

Ms Marshall's findings were given a warm welcome by the ADSW. "We share the commissioner's concerns about this most vulnerable group of young people," said Ms Docherty. "In general, local authorities do not set deadlines for moving on and most actively seek to support young people until they are ready to live independently. However, the most difficult and needy often leave the system too early.

"This report is clear: young people leaving the care system require corporate parenting' - support from not just social work but also education, housing and health if they are to overtake the disadvantage they have experienced. We need a long-term commitment to supporting young people with complex problems that is backed and funded by the Scottish Government."

Ms Marshall did find areas of good practice - although too often, she said, this was as a result of committed individuals. Some councils, for example, were able to find a way back to children's homes for youngsters who had struggled in the outside world. Some voluntary organisations, such as Quarriers and Barnardo's, step in to help with the transition. Services, however, are by no means universal.

"It's a postcode lottery," said Heather Gray, director of Who Cares?, the charity that represents the rights of children in care. "Things really vary from area to area. We need to get better at sharing some of the exceptionally good practice there is out there."