An inquiry by the public accounts select committee into the transition of care leavers into adulthood found there are “systemic weaknesses” in the provision of support they receive.
The report points to the fact that inspections by Ofsted have found that two thirds of local authorities’ care leaver services are either "inadequate" or "require improvement", and there is no clear relationship between the amount spent and the quality of service.
"The scale of variability in the quality and cost of support, and a lack of understanding of what causes this, show that this is a systemic issue, rather than a problem in just a few local authorities," the report states.
The report also highlights problems around the Staying Put initiative, introduced in 2014, which allows young people in foster care to stay with their carer until they are 21.
It states that in some areas foster parents are unable to keep a child past their 18th birthday due to funding problems. Meanwhile, in some cases, carers have had their payments reduced by up to 70 per cent once the young person turns 18.
The report calls for an urgent review of support for care leavers.
Labour MP Meg Hillier, who chairs the committee, said: "I believe young adults are being let down by the system that’s supposed to support them. Many are being cut adrift when they need help the most.
“People who have spent their childhood in care are still getting a rough deal when they badly need to be guided and supported.
“Local councils are spending widely different amounts of taxpayers’ money supporting these vulnerable young adults but the outcomes vary widely too – and the government has not got a grip on why there is no relationship between spending and outcomes.”
“It’s time the government reviewed its care leavers’ strategy to make sure these young people get the full support they need."
Roy Perry, chair of the Local Government Association’s children and young people’s board, defended the role of councils, arguing that the entire children’s care system needs to be better funded by government.
“Councils do everything they can to support all care leavers, providing help for youngsters with housing, finding a job and financial assistance as they move towards an independent life,” he said.
“However, the growing number of young people coming into the care system, alongside 40 per cent cuts to council budgets since 2010, means that this is becoming an increasing challenge.
“Councils cannot do this alone and we urgently need to see the whole system properly funded and joined-up to ensure children and young people receive the support they need, when they need it.”
A Department for Education spokesman said it plans to update the cross-government Care Leavers' Strategy, published in October 2013, “in order to continue to improve support for these young people”.
The spokesman added that policies, such as Staying Put and the appointment of personal advisers, were already “helping to improve the lives of care leavers”.