This report, commissioned from the National Foundation for Educational Research (NFER), is the first in-depth comparative study of arts projects in Pupil Referral Units and Learning Support Units in England. Evidence from pupils, teachers and artists testifies to the capacity of the arts to engage disaffected young people and to contribute significantly to their educational, social and personal development. NFER's findings reveal: increased knowledge and skills, improved ability to listen and communicate in a group, markedly better confidence and self-esteem, and, in the place of failure, a sense of achievement, satisfaction and above all of enjoyment. With the growth of Arts Council England's regional network of Creative Partnerships, aimed at fostering creativity and cultural activities in schools, especially in disadvantaged areas, 'Serious Play' provides timely recommendations for planning, costing and developing arts projects for excluded children and recommends sustained funding on a larger scale.