Around the corner from the Home Office, in the wall of a building now occupied by the Royal College of Vets, is a foundation stone for Mr Fegan's homes. The House of Mercy was founded in the early part of the last century ‘for the welfare of orphans, needy and erring boys’. Since then, erring boys (and girls) have increasingly been dealt with separately from those classed as needy – notwithstanding the fact that, in many cases, individual children fall into both categories.

The government changes of 2007, which restored to the department responsible for children's welfare a share in responsibility for youth justice in Whitehall, has reopened an important set of questions about agency responsibility for young offenders at the local level.

At the same time, there is a renewed and growing interest in how resources are used in the criminal justice system as a whole and whether increasing use of imprisonment represents a cost-effective response to crime. Government plans to spend £2.3 billion on capital costs for 10,500 new prison places by 2014 have begun to attract criticism, with the Justice Committee describing Lord Carter's report, Securing the future, upon whose conclusions the plans are based, as ‘deeply unimpressive’ (House of Commons Justice Committee, 2008a). The same committee has embarked on an inquiry into ‘justice reinvestment’, looking at the return for society of a policy of continued investment in prison building and other traditional methods of dealing with offenders (Allen and Stern, 2007).

These two strands of concern about responsibility and resources have served to ignite a particularly lively debate on the way we deal with juvenile offenders. There seems to be widespread agreement that there is too much use of both custodial remands and sentences, but strategies to reduce it have so far met with limited success. The Audit Commission's review of the reformed youth justice system in 2004 concluded that ‘the most expensive and one of the least effective sentences is custody’ and that the most persistent young offenders who might otherwise be sentenced to custody should receive an Intensive Supervision and Support Programme (ISSP) instead (Audit Commission, 2004, p 5). Among its recommendations, the Audit Commission suggested that Youth Offending Teams (YOTs) and courts should work to provide more feedback to high custody areas on the costs and the effectiveness of custody and community alternatives.