Inspectors of Parc Young People’s Unit in Bridgend were impressed by the way local services and families were engaged in support and resettlement, and praised a strong substance misuse service and relations between staff and young people.
Healthcare and education were found to be good, but inspectors said there could be better mental health provision and more Welsh language materials.
Chief inspector Anne Owers said: "Despite a rapid recent growth in its size, managers are to be congratulated for creating a safe and purposeful environment, distinguished by mutually respectful relationships between staff and young people."
Phil Wheatley, director general of the National Offender Management Service, said: "This is a positive report of which the staff and governor should be proud."
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