The Youth Justice Board has denied that the potential reduction in the number of places in secure children's homes could result in young offenders being forced to stay in prison longer.

The Secure Accommodation Network, which represents local authority secure children's homes in England and Wales, is concerned that more vulnerable young people will have to remain in youth offenders institutions as a result of financial pressures.

Concerns were prompted by warnings from the YJB that it might not be able to afford as many local authority secure unit beds as it had originally hoped. It blamed the rising cost of places, which in some cases is up 17 per cent. However, it was unable to say where any extra capacity would be found.

Bids to provide beds had to be submitted to the YJB by the end of September with the successful ones expected to be announced in January. The current contracts are due to finish at the end of March.

The YJB contracts 65 per cent of the 461 beds available in local authority secure children's homes in England and Wales. There is concern that some might not now receive contracts and be forced to shut.