This paper addresses the issue of what happens to young people excluded from school, both through formal and informal processes. Its particular focus is on those young people who have found their way into a ‘second chance’ or flexible school in England and Australia and who often come from the most oppressed and marginalised social groups in their respective locations. Exploring the policy context in England and Australia, the paper will argue that a particular constellation of policies framed by neoliberal, punitive, human capital and, to a lesser extent, social justice discourses have led to an increased demand for such schools in these two different countries. Drawing on observations and interview data in two schools in England and Australia, the paper will explore the current policy effects on young marginalised people’s education, challenge the notion that these young people are ‘unteachable’, will suggest that they have become in Bauman’s terms ‘collateral damage’ of the current system, and claim that second chance schooling has developed as a means of managing such ‘damage’. However, it will also suggest that the most successful of such schools have much to teach those concerned about retaining young people in current systems of schooling.