Chapter 3: Increasing opportunity for all

The central objective of the new spending plans is to build a fairer, more inclusive society that increases opportunity for all. In particular the Government is investing to provide education and employment opportunity for all and to tackle the causes of poverty, especially child poverty, as it takes forward its long term ambition to halve child poverty by 2010 on the way to eradicating it in twenty years. The Review also invests funds to narrow the gap between the most deprived communities and the rest of the country. The plans:

increase spending on education by 5.4 per cent a year in real terms over the next three years to give everyone the opportunity to get the skills and education necessary to succeed through:
raising standards further in primary schools, and extending particular help to young children at risk of falling behind;
a major drive to raise standards in secondary schools notably at Key Stage 3, through an extension of literacy and numeracy programmes; and
investing in lifelong learning to give more people the opportunity to gain new basic skills.
build on the success of the New Deal to provide employment opportunity for all by creating a new Employment Opportunities Fund to:
make the New Deal permanent;
extend the ONE service so benefit recipients receive a more integrated work-focused service; and
extend the New Deal for Disabled People nationally
fund special interventions targeted at the areas of greatest need and helping children at risk at crucial stages in life. This includes harnessing the power and expertise of the voluntary and community sector. The Review:
provides £100 million in 2001-02, £300 million in 2002-03 and £400 million in 2003-04 for the Neighbourhood Renewal Fund to deliver specific targets for key services to start narrowing the gap between the most deprived communities and the rest of the country;
more than doubles Sure Start funding to £500 million in 2003-04, compared to £184 million this year, so the programme reaches one third of poor children;
progressively introduces the Connexions personal adviser service for teenagers; and
creates a Children's Fund worth £100 million in 2001-02, £150 million in 2002-03 and £200 million in 2003-04 to invest in preventive services for vulnerable children and to build partnerships with the voluntary sector through a network of local children's funds.

A better start for children

3.1 The Government's objective is to create a society in which all children have opportunities to realise their full potential.

3.2 In moving towards this goal, Budgets since 1997 have increased financial support for all families with children, spending an extra £7 billion a year on support for children by 2001, through increases in the Working Families' Tax Credit, Income Support, Child Benefit and the new Children's Tax Credit.

Box 3.1: Key PSA targets - increasing opportunity for all

Raising standards in education

Increase the percentage of 14 year olds at or above the standard of literacy, numeracy, Information and Communications Technology (ICT) and science for their age. Subject to consultations, by 2007, 85 per cent to achieve level 5 or above in each of the key Stage 3 tests in English, maths and ICT, and 80 per cent in science.
Increase the percentage of pupils obtaining five or more GCSEs at grades A* to C (or equivalent):
increase the proportion achieving the standard by four percentage points between 2002 and 2004; and
at least 38 per cent to achieve this standard in every LEA by 2004.
By 2004, increase the percentage of pupils obtaining 5 or more GCSEs at grades A* to G (or equivalent), including English and maths. By 2004, 92 per cent of 16 year olds should reach this standard.
Lifelong learning
By 2004, increase by 3 per cent the percentage of 19 year olds achieving a qualification equivalent to National Vocational Qualification level 2 compared to 2002.
Make significant year on year progress towards fair access to higher education.
Reduce the number of adults who have literacy or numeracy problems by 2004.
Employment opportunity for all
Increase employment over the economic cycle.
A continued reduction in the number of unemployed people over the age of 18 over the 3 years to 2004, taking account of the economic cycle.

Tackling child poverty

Make substantial progress towards eradicating child poverty by reducing the number of children in poverty by at least a quarter by 2004.
Reduce the number of children in households with no-one in work over the three years to 2004.

3.3 These changes will lift 1.2 million children out of poverty. However, the Government recognises that child poverty is about more than just low incomes. Eradicating child poverty over the next twenty years therefore requires a policy response that includes:

new investment in education;
providing employment opportunity for all and making work pay;
targeting special help in the poorest communities; and
helping children and young people at risk and building partnerships with the voluntary and community sectors.

3.4 This approach recognises that children from disadvantaged homes face greater barriers to achieving their potential. This lack of opportunities creates a cycle of disadvantage as those who leave school with poor qualifications face a higher chance of becoming unemployed. Equally, children in deprived areas face higher chances of experiencing problems such as teenage pregnancy, drug abuse and ill health. They are also more likely to commit crime and to suffer from its effects.

3.5 The Government is committed to helping people break out of these cycles of deprivation and failure. This cannot be done only by compensating the deprived and the poor through higher incomes. It means providing opportunities to learn and work throughout people's lives, giving them the chance to counter disadvantage, both in this generation and those to come.

3.6 In the past, spending on children - covering as it does so many departments' responsibilities - was fragmented and often uncoordinated. As a result, issues related to child poverty often fell between or cut across traditional departmental boundaries. This Review has looked at how the programmes of different departments and services could be combined and coordinated to have the maximum impact towards reducing child poverty and social exclusion.

Education opportunity for all

3.7 Education is critical both to employment and to wider well being. This Review provides an average 5.4 per cent a year real increase in funding for UK education over the next three years. Together with the extra boost for education in 2000-01 announced in the Budget in March this represents an average growth rate of 6.6 per cent over four years from 1999-2000 across the UK to modernise schools and deliver demanding new targets for literacy, numeracy, science and ICT. This is the highest growth rate over a four year period for 20 years.

3.8 Ensuring that people in deprived areas have access to educational opportunities enhances the likelihood that they will gain employment and avoid low pay, and as a result keep their children out of poverty. Equally, education is the best route for children to break out of poverty as those who do better at school are more likely to earn higher wages later in life.

3.9 Building on recent reforms, new measures will help ensure that everybody has access to the education opportunities that will help them in later life. The new Neighbourhood Renewal Fund will provide £800 million over the next three years, targeted at local authorities covering the most deprived areas to help meet the Government's aim to reduce the attainment gap at Key Stage 2 in English and maths between the most deprived areas and the rest of the country. A target will be announced in due course.

Investing in schools

3.10 The Government is both adding to the funding available to schools and modernising the way it is delivered and used. The Standards Fund has made a major contribution to raising standards, but is now being radically reformed to enable schools to have greater freedom over how the money is spent and to reduce bureaucracy.

3.11 Opportunities in primary schools are already being transformed by the literacy and numeracy strategies. These will be complemented by new spending on catch-up programmes for primary pupils of all ages who are at risk of falling behind, a new focus on literacy and numeracy in the first year at secondary school, more training for head teachers and other initiatives.

3.12 The specialist schools programme has been at the forefront of the Government's drive to modernise the comprehensive system since 1997. They show significant gains in attainment: accordingly the programme will now be extended.

Lifelong learning

3.13 The Government aims to ensure that everybody has the opportunity to acquire the skills necessary to get jobs in the modern economy. In this Review the Government will ensure progress towards its ambition that by 2010, 50 per cent of young people will be able to participate in higher education, in part by widening participation among people from lower socio-economic groups, who are currently under-represented. The Government has set a target to make year on year progress towards fair access to higher education, as measured by Funding Council benchmarks. These benchmarks measure the levels of participation in higher education which would properly reflect existing levels of attainment of those from the maintained and private sector, different social classes and different areas of the country.

3.14 Around 20 per cent of the adult population continues to face major numeracy and literacy problems. The Government will also invest more in helping adults with low or no skills to gain proficiency in literacy and numeracy, contributing both to increasing their job opportunities and to their lives outside work.

3.15 To help adults gain essential new skills, around 300 Information and Communications Technology (ICT) learning centres will be open by spring 2001 and up to 1,000 by 2002. In addition, up to 100,000 poorer families will be able to lease low cost recycled personal computers under the Government's pilot project 'Computers Within Reach'. For adults wishing to update or build on existing skills, the University for Industry will be fully operational in the autumn.

3.16 More details on the outcome of the Review for education are in Chapter 7.

Employment opportunity for all

3.17 Employment opportunity for all is the modern definition of full employment. The Government's ambition is that by the end of the decade there will be a higher percentage of people in employment than ever before. Achieving this requires macroeconomic stability underpinned by measures to ensure that individuals throughout the country are able to compete effectively for jobs, that there is a secure transition from welfare into work and that people are able to progress once in work.

3.18 Research shows that work is the best route out of poverty. The Government's aim of employment opportunity for all is therefore a key part of its strategy for reducing poverty. It is determined to ensure that there are employment opportunities across the country.

3.19 Employment currently stands at a record high level, with over 1 million more people in work than in spring 1997. The ILO measure of unemployment is at 5.6 per cent, its lowest level since the series began in 1984, while the claimant count currently stands at 1.1 million, its lowest level for more than twenty years.

3.20 Although unemployment is low, the UK continues to have a high proportion of workless households. Around 6.7 million people below pensionable age, including 2.2 million children, live in households where no-one is in work.

3.21 As well as 1.1 million unemployed people claiming Jobseeker's Allowance (JSA), a further 3.8 million people of working age are receiving other out of work benefits, including lone parents, people with disabilities and those with long-term illness. Over 50 per cent of lone parent households have no-one in work, compared to only 7 per cent of couples with children.

The welfare to work strategy

3.22 The Government's strategy for ensuring employment opportunity for all who can work, matching rights with responsibilities, comprises the following key elements:

helping people to move from welfare to work, through the New Deal and ONE - the Government's integrated, work-focused service providing benefits and employment advice;
easing the transition into work, by removing barriers to working and ensuring that people are financially secure when moving from welfare to work;
making work pay, through reform of the tax and benefit system; and
securing progression in work, through lifelong learning.

3.23 Working age people without work do not constitute a single group facing identical barriers to work. The New Deal has therefore been developed as a set of programmes designed to help address the different barriers faced by different groups of people. The programmes have been continually developed and improved in the light of emerging evidence.

3.24 The cross-departmental review of Welfare to Work and ONE continued this process of development, expansion and enhancement. It builds on the success of programmes such as the New Deal 18-24, which independent evaluation by the National Institute for Economic and Social Research suggests largely pays for itself through reduced benefit payments and increased tax receipts. Details of the outcome of this review are in Chapter 26.

3.25 A new Employment Opportunities Fund worth £875 million in 2001-02, increasing to £1.4 billion in 2003-04, is being established to:

make the New Deal permanent, by providing money to maintain and extend New Deal employment programmes;
extend the ONE service so that benefit recipients will receive a more integrated work-focused service delivered by a new working age agency;
confirm the Government's intentions, as set out in Budget 2000, to enhance the New Deal 25 plus from April 2001, aligning the rights and responsibilities of jobseekers over 25 more closely with those aged 18 to 24; and
support disabled people seeking work through the national extension of the New Deal for Disabled People and Rehabilitation and Retention pilots.

National Childcare Strategy

3.26 Expanding childcare provision is a key part of the Government's employment strategy. As well as helping parents to find jobs, gain skills and study, the Government is increasing the availability of affordable high quality childcare through the National Childcare Strategy. The new childcare tax credit in the Working Families' Tax Credit introduced in October 1999 is already helping over 100,000 parents to pay for childcare.

3.27 This Review increases the funding available to support the expansion of childcare. This will increase support for childcare providers - both private and voluntary sector - in the most deprived areas where the childcare market faces barriers to development. The new resources also allow for the provision of grants and support for new childminders.

3.28 Flexible, accessible and affordable childcare is particularly important for groups such as lone parents. Budget 2000 announced a further package to help lone parents, extending the New Deal for lone parents. From April 2001, all lone parents with children over the age of five on Income Support will be required to attend a work-focused interview to guide them through their choices. This was accompanied by further help with training and childcare.

Targeting those most in need

3.29 Over the last twenty years poverty has become more concentrated in certain neighbourhoods and estates. Compared to the rest of the country, deprived areas suffer from 30 per cent higher mortality rates; 25 per cent more people with low skills; unemployment rates six times as high; and burglary rates many times the national average. The Government is committed to building a fairer and more inclusive society in which everyone can contribute to and benefit from rising economic prosperity.

Tackling deprivation

3.30 The cross-departmental review of Government Intervention in Deprived Areas examined what needed to be done to begin to close the gap between the most deprived areas and the rest of the country, and so give both adults and children in these areas the opportunity to break out of poverty and deprivation. As a result, for the first time, departments are setting specific targets - in the areas of education, employment, health, crime and social housing - to start narrowing the gap between the most deprived areas and the rest of the country. To deliver the targets, departments will ensure that sufficient extra funds reach deprived areas. As a first step, local authorities covering the most deprived areas will benefit from a new Neighbourhood Renewal Fund, worth £800 million over the next three years.

Box 3.2: Key PSA targets - tackling deprivation

To raise standards in the most deprived areas, targets have been set in the PSAs of key public services:

In education, the Government will increase the percentage of pupils obtaining 5 or more GCSEs at grades A* to C (or equivalent) to at least 38 per cent in every LEA by 2004. A target to reduce the attainment gap at Key Stage 2 (age 11) in English and maths will be announced in due course.
Over the three years to 2004, taking account of the economic cycle, the Government will ensure an increase in the employment rates of the 30 local authority districts with the poorest initial labour market position. It will ensure a reduction in the difference between employment rates in these areas and the overall rate.
The Government will reduce the level of crime in deprived areas so that by 2005, no local authority area has a domestic burglary rate more than three times the national average - while at the same time reducing the national rate by 25 per cent.
In the light of the cross-departmental review of Government Intervention in Deprived Areas, a health inequalities target will be announced in the National Plan for the NHS.
The Government will ensure that all social housing is of a decent standard by 2010 with the number of families living in non-decent social housing falling by one third by 2004, and with most of the improvement taking place in the most deprived local authority areas.

3.31 Research by the Social Exclusion Unit ¹ and others shows that main services need to work together at local level to tackle the problems facing deprived neighbourhoods to improve outcomes. Service providers across the country will be encouraged to establish Local Strategic Partnerships (LSPs) bringing together the public, private and community sectors to ensure all the initiatives and streams of funding in an area are brought together to best effect. LSPs in the most deprived areas will receive start-up funding through the New Deal for Communities. This will ensure local people and communities are empowered to play their full part in setting local priorities and determining local action to turn around their neighbourhoods. Further details are in Chapter 23.

Sure Start

3.32 Particular challenges and difficulties may be faced by some families and children, either those in particular areas, or at particular points in their lives. The Government's strategy involves investing additional money in those most at risk, investing in the prevention of future problems.

3.33 Sure Start was established following the 1998 Comprehensive Spending Review to improve the life chances of very young children in deprived areas by making sure they are ready to learn when they get to school. By 2001-02 there will be 250 programmes running at a neighbourhood level, supporting 18 per cent of poor children under four. To help meet the Government's target on reducing child poverty, the cross-departmental review of Sure Start examined this programme. More details of that review are in Chapter 24. The Spending Review:

provides for a major geographical expansion of Sure Start, by more than doubling its funding to £500 million in 2003-04, so that it reaches one third of all poor children under four by 2004. The programmes will continue to focus on young children in deprived areas. To target particular pockets of deprivation, for example in rural areas, some of the new programmes will be geographically small; and
provides new approaches including extra help for first-time mothers and better training and support for Sure Start programme staff.

Young people at risk

3.34 Providing targeted support for vulnerable young people who experience problems such as drug abuse, youth crime, school failure, mental health problems and homelessness, is a vital part of the Government's strategy to reduce child poverty. Alongside Sure Start, the Government has launched programmes like Quality Protects, Connexions and the reform of the youth justice system to help such children. The cross-departmental review of Young People at Risk, detailed in Chapter 25, builds on those initiatives.

3.35 The new plans also provide for:

progressively introducing the Connexions personal adviser service to support children aged 13-19 to stay in education or undertake training. Alongside Connexions there will be an expansion of other services for vulnerable young people, such as mental health services and drug treatment;
establishing a Children's Fund worth £450 million over the next three years to help vulnerable children and young people, and prevent them from falling into poverty and disadvantage. As announced in the Budget, a part of this fund will be distributed to local community groups through a network of local funds; and
broadening and strengthening coordination of services to support children through local Children and Young People's Partnerships.

Box 3.3: Tackling discrimination

The Government is committed to creating a country where every member of society is able to fulfil their potential. The new plans take account of the needs and experiences of all groups in society. Further key commitments for developing policy and delivering outcomes supporting equality of opportunity will be set out in the Service Delivery Agreements.

The Government is committed to making Britain a successful multicultural society. The plans build on the Home Office publication Race Equality in Public Services: driving up standards and accounting for progress,1 issued in March 2000, by specifying new targets for the promotion of race equality within the provision of services to the public. These include increasing employment of disadvantaged groups, including those from ethnic minorities, and raising ethnic minority confidence in the criminal justice system.
The new plans will improve the choices for women to gain and remain in employment. The National Childcare Strategy will help overcome one of the main barriers to employment and education for many parents, particularly women. This builds on the childcare element of the Working Families Tax Credit. The Government also recognises the valuable role played by carers, many of whom are women, in our communities. The plans provide a package of enhanced respite care and financial support, including an increase in the carers premium in income support.
The Government is committed to improving the prospects of all disabled people, and ensuring comprehensive, enforceable civil rights for them against discrimination in society or at work. There will be additional support for disabled people seeking work, including a national extension of the New Deal for Disabled People.

^1. Policy Action Team 17 Report, Joining it up Locally. Available on the Social Exclusion Unit website (external website)