The Secretary of State for Health said that all local councils would, for the first time, have to produce action plans.
The decision follows the publication of a report into care that found lax vetting of staff; failure to run police checks on new staff. and no systematic way of ensuring that staff followed rules.
The report, by the Social Services Inspectorate, painted a "sorry picture" with none of the 27 local authorities inspected confident about its services for children. It said vulnerable 16-year-olds were placed in bed and breakfast accommodation and then left to wander the streets, and that young people with mental health problems were wrongly placed through lack of alternatives or funding.
During the inspection - one of the largest ever carried out - children identified as being at risk in three of the authorities did not have social workers allocated to their case, and in one authority more than a quarter of children did not have a social worker.
While children in care make up 0.5 per cent of the child population, young men who have been in care form 22 per cent of the jail population and make up 39 per cent of prisoners under 21 years old. In addition, one in three people sleeping rough in London was once in care, and one in four children in care aged, 14 or over, does not attend school regularly.
"In far too many cases not enough care was taken with the children taken into care," Mr Dobson told the Quality Protects conference, attended by chief executives, council leaders and directors of social services yesterday. "They were children at risk, so they were taken into care, and sometimes ended up more at risk than before they were taken into care. ... Many children were harmed, rather than helped."
To combat this, local authorities must submit a range of objectives by next January, before they receive funding - and they will have to meet those targets and report regularly to government officials.
An "A" team of eight highly qualified social workers, with special knowledge of health and education, will help to ensure the new system is working around the country.
Caring for young people over the age of 16 will also be made a priority, and councils will have to make contact at least four times a year with those who have left care.
"We wouldn't turn our children out when they turned 16," added Mr Dobson. "But that's what's happening today. It's a disgrace. It's just wrong."
Paul Boateng, the Health minister with responsibility for social services, said that the Government would introduce tough new measures - to be included in a White Paper - against those who do not comply. "Failure will not be tolerated. The consequences if they fail will be grave," he promised.
The Government aims to ensure local councils make sure children attend school, and it will set new GCSE targets for children in care.
It also wants to reduce the number of children re-registered on the child protection register. To achieve this, Mr Dobson said that there would be a "substantial" special grant for children's services, available from next April.
"We wouldn't tolerate our nearest and dearest going through a rapid succession of `placements' every year," he said. "We wouldn't tolerate them being placed in homes unsuited to their needs. We wouldn't expose our vulnerable offspring sharing with others who were fearsomely violent or sexually voracious."
Roy Taylor, president of the Association of Directors of Social Services, said that it was "fully behind" the drive to improve children's services, but that local authorities "badly needed additional resources to be able to do that".Reuse content