The St John's unit in Tiffield had 16 beds for young people referred through the criminal justice system or for welfare reasons. A council statement said that for the unit to be economically sustainable it would need the YJB to place young people there, but after talks the YJB was unwilling make a long-term commitment.
The unit needed 10 beds to be occupied throughout 2006-07 to stay open. Currently, three beds are occupied and the unit is running with reduced staff.
Nine units have closed in the past four years, leaving 20 open.
Roy Walker, deputy chair of the Secure Accommodation Network, which represents local authority secure homes, said: "The number of units that have closed has been alarming."
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