Spending watchdogs have become embroiled in a Whitehall clash with the Department for Education (DfE) over the national performance of early intervention programmes for vulnerable children.

This follows publication today of a report by the National Audit Office into how local authorities spent £2.5bn in 2012/13 supporting some 68,110 children in either foster or residential care  – the highest level for two decades.

Auditors said the DfE, which holds councils to account, had no way of measuring the effectiveness of the care system and officials failed to understand how care costs build up amid a rapid increase in the number of children being taken into care in the aftermath of the 2007 ‘Baby P' case.

Figures compiled by the NAO suggest local authorities annual average spend on child residential care was between £131,000 and £135,000 and between £29,000 to £33,000 for foster care.