The government has unveiled proposals to crack down on councils’ use of unregulated care homes, amid increasing concerns that looked-after youngsters are being placed in accommodation that puts them at risk of exploitation.

The education secretary, Gavin Williamson, is to propose a ban on under-16s in care being accommodated in unregulated placements, as well as introducing new minimum quality standards for unregulated provision used to house over-16s.

Campaigners and police have warned that unregulated accommodation can be targeted by gangs wishing to exploit children for drugs or sex. In some instances, children have been placed in Airbnbs, on boats or in caravans.

More than 6,000 youngsters – 100 of them under 16 – are currently placed in unregulated accommodation, up from 4,800 in 2016, a rapid increase blamed on rising numbers of looked-after children and a lack of registered homes.

Williamson said: “There are no circumstances where a child under 16 should be placed in accommodation that does not keep them safe. That is unacceptable and I am taking urgent action to end this practice and drive up the quality of care provided to all vulnerable children.”

A Guardian investigation in December found that councils were spending millions of pounds a year on unregulated accommodation, and that many children were placed in homes outside their local borough – often when an emergency placement was needed and no other options were available.

The consultation on the proposed changes comes ahead of a review of the care system promised in the Conservative party’s general election manifesto. The cost of spiralling numbers of children in care – currently about 78,000 in England and Wales – coupled with austerity cuts has pushed some councils into financial jeopardy.

Ofsted will be given new powers under the proposals to take legal action and issue enforcement notices which would force illegal providers to close, register or face a penalty. Councils which make illegal placements would be punished by Ofstedthrough the inspection regime, and would face the further threat of government intervention to take management of children’s services out of their control.

Unregulated provision is essentially when children, usually over the age of 16, need support to live independently rather than needing full-time care. It is allowed under the law, although it is not regulated by Ofsted.

Unregistered provision that claims to offer any form of “care” as opposed to just support is illegal. However, because there is no legal definition of what care means, a loophole is created that can be exploited.

Anne Longfield, the children’s commissioner for England, said the proposals were long overdue: “I have heard horror stories about very vulnerable children being left to stay in completely inappropriate and sometimes very risky places, often miles away from the place they know as home.

“The government should now go further to make sure every child growing up in care lives in high quality accommodation that suits their needs. This will require financial support for councils so they can grow their own good local provision for children in their local areas.”

Mark Russell, chief executive of the Children’s Society charity, said: “Children are often placed in these settings in an emergency and out of their home area, where they may not get the support they need and can be at particular risk of going missing and being criminally or sexually exploited.

“All accommodation for children in care has to be suitable for their needs and no child should be placed in accommodation where they are not safe. It’s vital that quality standards are introduced across the board.”

• This article was amended on 12 February 2020. An earlier version said that councils which make illegal placements “would be punished by Ofsted, with the threat of having children’s services taken out of their control”. Ofsted can’t take children’s services departments out of local authority control. This has been amended to say that such councils would be punished by Ofsted through the inspection regime, and would face the further threat of government intervention to take management of children’s services out of their control.