Mr Cameron said intervention projects stopped troubled children becoming troubled teens
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Problem children should not be "written off" but tackled at an early age to cut youth crime, says David Cameron.
Too many children went on a "depressing journey" from exclusion from school, to crime then jail, the Tory leader said.
But rather than getting help at an early age, he said they were left to get worse until they ended up being excluded or sent to a youth prison.
He said he wanted a "major expansion" of intensive alternative education, for those with severe behaviour problems.
Mr Cameron was addressing the annual Local Government Association (LGA) conference in Birmingham.
'Soft bigotry'
He said giving more powers to local communities was the way to heal a "broken society" - part of his calls for more social responsibility.
Too often, he said, disruptive children suffered from "the soft bigotry of low expectations" and were "managed" rather than "turned around".
"We simply write them off," he said.
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We are closing the places kids do need and putting them in places which are wrong for them
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He blamed the Labour government for its "inclusion" policy of getting more children with special needs into mainstream schools for longer - many of whom ended up in special pupil referral units, after being excluded from mainstream schools.
"This is quite simply a national scandal," he said.
"We are closing the places kids do need and putting them in places which are wrong for them."
Classroom disruption
The failure to provide tailored education for such children had caused "an explosion in classroom disruption" he said.
Mr Cameron called for a "step change" in dealing with problem children earlier, highlighting projects like First Steps in West London, where disruptive children are sent aged three or four, but many return to mainstream education after a year.
Mr Cameron said the "inclusion" policy had been a disaster
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For older children, he flagged up projects which "get to know them properly and give them the attention they need", like Amelia Farm in Wales or Hill Holt Wood in Lincolnshire.
"Projects like these cost a fraction of Pupil Referral Units and we should be looking for a major expansion in their work," he said.
He said he wanted councils to take the lead, working with police, social services, school and parents to identify the children in need of intensive help.
Statistics show that the Conservatives also steadily closed special schools when they were in power.
In July 2006 the Commons education select committee found special needs education in England was "not fit for purpose".
MPs said the government needed to clarify its inclusion policy - as it was causing confusion about whether that meant special schools should close.
In November the government announced a new test to ensure special schools were not closed, unless better alternatives were available.
Prime Minister Gordon Brown has also called for more involvement from charities and the voluntary sector to help get mentors and one-to-one coaching for youngsters who have "fallen through the net".
Last year his predecessor Tony Blair called for early intervention for "hard to reach" families - but denied he was talking about "baby Asbos".