More than 90% of persistent young criminals on the community punishment programme re-offended within two years, an Oxford University study suggests.
The surveillance programme is an alternative to custody
Of 900 offenders under 18 analysed, the average number of offences committed in the two years was 7.1, the study found.
But the frequency of re-offending fell 40% one year and 39% over the second.
The Youth Justice Board, which runs the Intensive Supervision and Surveillance Programme in England and Wales, said the re-offending rate was "very high".
The ISSP programme aims to reduce offending and can involve electronic tagging.
In the two years prior to the programme, offenders had committed an average of 11.6 offences.
"Indeed, it was always unlikely that persistent young offenders would cease offending completely as a result of ISSP: hence the YJB's more specific aim of reducing the frequency and seriousness of subsequent offending," the report said.
The frequency of re-offending went down by 40% over one year and 39% over two years - far exceeding the board's aim of reducing frequency by 5%.
The 91% re-offending rate was slightly up on last year's rate of 89% re-offending within 12 months of the programme.
ISSP was introduced in 2001 for persistent offenders aged under 18, as an alternative to custody.
It is a compulsory programme of surveillance, with a minimum of two checks per day.
Electronic tagging or regular telephone contact with the offender is also used.
The report suggested that drug treatment order ISSPs - when offenders are put on the scheme after a jail term - were the worst performing.
The report, by academics at the University of Oxford said: "It is beyond the scope of the analysis to address exactly why [drug treatment order] ISSPs were performing significantly worse than the comparison sample.
"It is also worth noting this finding does not mean that custodial sentences are more effective than community ones: we have not compared custodial interventions against community disposals because we do not consider them well-matched for a comparison in this study."
Staff told researchers that youths sometimes reacted badly to drug treatment order ISSPs, regarding them as a "double punishment".
Shadow home secretary David Davis questioned the effectiveness of the government's flagship scheme, saying: "These figures are an utter disgrace."
He added: "We need workable solutions to tackle youth crime.
"These figures clearly show that the government's commitment to be 'tough on crime and tough on the causes of crime' was just hot air."