The prison reform charity made the call in its submission to an inquiry into looked-after children run by Parliament's Children, Schools and Families Select Committee. The submission said financial incentives should be used to encourage councils to support looked-after children who are imprisoned as they currently get little help.
Frances Crook, director of the Howard League, said at present local authorities had more of an incentive to put children in custody than to keep them out.
"These are often complicated, and therefore expensive, children and if they go into custody then the local authority doesn't have to pay - it's respite," she said.
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