Inspection of privately run children's homes will be strengthened following the collapse of provider Sedgemoor, the junior children's minister said this week.
Kevin Brennan told MPs that the Sedgemoor case had been "completely unacceptable" and promised a "closer and better" inspection regime.
The company, which was backed by private equity firm ECI, went into administration last September, ending children's placements overnight.
Brennan made the statement during a meeting of the children, schools and families select committee session on the Children and Young Person's Bill.
Committee chair Barry Sheerman said vulnerable young people had been exposed to "dramatic changes" when Sedgemoor "pulled the plug on finances" and asked Brennan whether there was anything in the bill to prevent such a case from happening again.
Communication failure
Brennan said the bill did not contain any measures but the government was working with Ofsted to improve protection."We must learn the lessons from Sedgemoor and not leave children high and dry," he added.
Annette Brooke MP also raised concerns that Ofsted failed to communicate with local authorities and youth offending teams when there were problems with children's homes.
Brennan said it would become the duty of Ofsted to ensure every council was informed of problems, and indicated the body would be given new powers to freeze referrals while homes were given time to improve.
The Children and Young Persons Bill is due to enter the Commons after Easter.
More information
Children, schools and families committee
Children and Young Persons Bill
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