Deborah Jones, chief executive of Voices from Care Wales, said services were "heavily into labelling to lock young people into services, where they were depressed because they weren't living with their families. Laming and Waterhouse have told us to listen to the child, but we are still not doing it."
A report from the Office for National Statistics found 49 per cent of looked-after young people aged five to 17 in Wales, and 45 per cent in Scotland, had a mental health disorder.
Dinah Morely, acting director of Young Minds, said it was vital to give children the right supp-ort as some of them had behavioural problems that were so entrenched they needed help.
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