Children removed from their family home are being sexually and physically abused in foster homes - and the Social Development Minister says there's no evidence they're any better off in state care.

Children's Commissioner Russell Wills has released his first annual report in to how well Child Youth and Family (CYF) are looking after children in state care. His findings reveal the Government department is failing thousands of children.

Children interviewed for the report spoke of sexual, physical and verbal abuse in foster homes; of being moved around constantly; separated from siblings; depression, drugs and alcohol.



Social Development Minister Anne Tolley said none of the findings in Wills' report were a surprise.

"If the state takes them into their care then they have the responsibility to make sure those kids live better lives and I don't see the evidence and the Children's Commissioner report doesn't see the evidence that this is happening," Tolley said.



Wills said CYF was failing to put children at the centre of what they do.



"When children are in care, Child Youth and Family is effectively their parent. That is a significant responsibility," he said.



"These children should come out of the system in a better place and with the prospect of better future lives. Unfortunately we can't say they are."



In 2013-14 there were 117 children in the custody of CYF reported to be abused; 88 were in the care of a CYF caregiver, 25 were formally placed with their parents but still officially in CYF custody, and five were abused while living with an unapproved caregiver or in an unapproved placement.

Children interviewed for the report said despite abuse being quite common, very few cases were officially recorded.



Tolley said when abuse was uncovered it was acted on but the report had shown there was "no sort of outside body that looks at CYF independently other than [the Children's Commissioner]".



An expert panel already set up to overhaul CYF would address this, she said.

The report also details how 1000 of the 1700 children who leave care each year are unaccounted for.

Only 20 per cent of children in state care achieve NCEA level 2 compared to a national average of 70 per cent.

Nearly a third of 14 to 16-year-olds in state care were charged with a criminal offence.

Eva Bradley Photography Children's Commissioner Russell Wills says children in state care should come out better off but they're not.

While CYF was good at intervening and assessing high-risk kids - they hadn't managed to work out how to provide good long term care, Wills said.

Labour's children spokeswoman Jacinda Ardern said the buck stopped with CYF and they were responsible for the outcomes of children in their care.

"We've got to start acknowledging that the kids we are seeing in this system now are the kids we see in prison 10 years down the track - that is not anecdotal, that is fact."