The HM Inspectorate of Education report examined the education of children in care and found moves to give teachers more freedom on what to teach were proving beneficial.
The watchdog said the flexibility of the Scottish government's Curriculum for Excellence was helping local authorities offer looked-after children tuition that better met their individual needs.
The Count Me In report also found council chiefs are taking a greater interest in the education of looked-after children, plus more joint planning between education and social services.
The watchdog warned that inter-agency working to help looked-after children was still in need of development and called on councils to introduce joint training for professionals working in children's services.
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