The ACT's most vulnerable students have shown little improvement in the past three years.

As the country's largest provider of educational support to disadvantaged young people, the Smith Family has labelled the Council of Australian Governments Reform Council's latest education report as evidence for the need for urgent reform.

In the ACT and nationally, a gap of nearly 20 per cent remains between the outcomes of indigenous and non-indigenous students.

While indigenous year 12 attendance is up nearly 5 per cent, indigenous year 10 attendance dropped 3 per cent.

Sixteen per cent of ACT students from the most disadvantaged backgrounds remained below the national minimum standard for year 5 reading compared with 0.9 per cent of students from wealthier families.

The Smith Family's NSW/ACT general manager, Theresa Collignon, said the results painted a bleak picture for anyone interested in Australia's future.

''Australia's future prosperity and social cohesion relies on all young people receiving the very best education. From these figures it's clear that a significant minority of young Australians are missing out,'' Ms Collignon said.

''There is stagnant literacy and numeracy achievement among disadvantaged young Australians, and very limited improvement in the large gaps in educational performance between this group and their more advantaged peers - it's a very grim picture.''

She said the Gonski education funding reforms using needs-based funding were ''a key starting point for turning around these very concerning results''.

''But getting vulnerable young Australians off to the right start isn't just about arriving at a fairer education funding model - as important as that is,'' she said.

The Smith Family wants state and territory governments to expand successful school-community partnership models that direct resources to support the retention and achievement of vulnerable children.

Mentoring and technology should also be used more widely and effectively to reach disadvantaged schools and students to improve literacy and numeracy and school retention.

''And finally, with so many school leavers not in any training, further education or work there is clear need to lift our game in preparing disadvantaged young Australians for their future careers,'' Ms Collignon said.

''We need to encourage more young people from disadvantaged backgrounds to become the first in their family - not only to complete Year 12 - but to go on to higher education.

''We know what works, it's time to start looking at ways of expanding on the knowledge, expertise and resources available to us to get better educational outcomes for young vulnerable Australians.

''Turning these numbers around is a long-term process, we're not going to see quick results. But we need to urgently start down the path of addressing the shortcomings of our system and giving vulnerable young Australians the chances they deserve. How long are we going to wait?''