UPDATED 8.20AM: Children must be placed at the heart of everything Child, Youth and Family does, the outgoing Children's Commissioner has said in a new report. 

NZH Focus: Vulnerable youth in 'prison-like' conditions

Dr Russell Wills has today released his second New Zealand State of Care report - his final act in the role.

He's made three recommendations in the report, including getting a plan in place to reduce the risk of a dip in performance during the transition to the new Child, Youth and Family system.

LISTEN TO DR WILLS' FULL INTERVIEW WITH MIKE HOSKING ABOVE

Dr Wills described the planned reforms as "visionary" back in April, but still believes children currently in the system need to receive more child-centred services right now.

He said "child-centred" literally means listening to the child, and that's the only way CYF will ever actually meet their needs.

"The key thing that we want to see from Child Youth and Family for children in care is a much clearer idea - from the national office right the way down to the coalface - about what it means to be child-centred when looking after these children in care."

"60,000 kids are going to come into contact with CYFs this year. These are the most vulnerable kids in our country, and we can't afford a dip in performance for those kids."

The Labour Party is advocating that more people be employed on the frontline of social work to ensure that appropriate care is being delivered. 

Labour's children spokesperson Jacinda Ardern said the only way to avoid a dip is to invest in more social workers.

LISTEN: Jacinda Ardern - CYF's consistently lacks resources

"Thirty-five-million dollars went in this budget into Child Youth and Family. The Minister has said actually that's just to tread water, there will not be one new social worker as a result."

A report in September 2015 found that almost 90 percent of the children who had been through the CYF system since 1991 were on welfare benefits, nearly 80 percent did not have NCEA Level 2 qualifications, and more than 30 percent had been referred to youth justice by age 18. 

In response, the Ministry of Social Development proposed a new agency which would spend $1.3 billion a year by 2019-2020, increasing CYF's budget but also taking money from the budgets for Health, Education, Corrections, and Work and Income.

However most of the work done with children under the new system would be contracted out to non-government organisations (NGOs) and iwi.  

At the time of the reform announcement, Nicola Atwool - a social work professor at Otago University - noted that contracting out state care had not worked in Australia. She hoped the government would try a "partnership" approach where CYF was legally responsible for kids in care but worked closely with iwi and other agencies.