The local government ombudsman Jerry White said the failures caused injustice to the care leaver, who was taken into the care of the council aged 13 in 2000.
In his report the ombudsman said the council failed to take into account the care leaver's vulnerability and bouts of depression when assessing and supporting him.
Lack of support with his financial needs after leaving school and a failure to prepare a detailed education plan for him before starting a diploma course in 2006 were among other concerns.
This lack of support left him with mounting rent arrears and considerable uncertainty about his future. A charity stepped in to support the care leaver financially and with support.
The ombudsman ordered the council to pay the charity £2,000 in recognition of its support of the care leaver, who cannot be named for legal reasons and is referred to in the report as Mr Smith.
The ombudsman said: "Mr Smith is to be commended for his attempts to pursue his education despite the lack of clarity on financial matters and consistent support from the council."
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