Labour taskforce to help underclass

Tony Blair has taken a crucial step towards restoring Labour's claim to be a party for the poor by ordering the establishment of an unprecedented and high-powered unit to bring "the underclass" back into mainstream society.

The Prime Minister' s decision to draft high-flying civil servants from a wide range of departments into the new unit, which will operate at Cabinet Office level, represents the first concerted government effort to tackle the growing problems of those Labour refers to as the socially excluded.

The new unit, which will report directly to Mr Blair, and will be announced by Peter Mandelson, minister without portfolio, today, represents a startlingly ambitious effort to redeem the Prime Minister's pledge to give new hope to the most disadvantaged in society. Mr Mandelson will argue in his Fabian lecture today that Labour's commitment to those excluded from society gives the lie to criticisms like those of Roy Hattersley, the former deputy party leader, that Labour no longer believes in a more equal society.

The "Social Exclusion Unit", as it will be known, whose establishment has been the subject of intense activity in Whitehall since Mr Blair's post-election "one nation" speech at the Aylesbury estate in Southwark, south London, will be headed by Robin Young, a senior deputy secretary in the Cabinet Office's economic and domestic secretariat. The Prime Minister pledged in that speech that there would be "no forgotten people in the Britain I want to build" and added that he was determined to turn round the "dead weight of low expectations, the crushing belief that things cannot get better."

With a heavy emphasis on preventing social exclusion, rather than merely ameliorating its effects, the unit will be given exceptional clout as it will be able to stake a claim for funds freed up by government department spending reviews ordered throughout Whitehall.

The formation of the unit, which will work closely with the No 10 Policy Unit, will initially target those issues where ministers and officials believe rapid results can be achieved. These include action on disaffected youth, including new measures to deal with school exclusion, truancy and juvenile crime, as well as an interdepartmental drive to prevent teenagers from children's homes from drifting into homelessness and crime.

Its remit will specifically include a "racial dimension" in recognition that people from ethnic minority groups figure disproportionately highly among the long-term unemployed, lone parents, and those expelled or excluded from school. A central premise of the unit will be Mr Blair's concern that millions of pounds are spent by different agencies, often on the same people and with the minimum of co-ordination and effectiveness. He said in his Southwark speech there were "literally dozens of public agencies" on every poor housing estate, "all often doing good work but all often working at cross purposes".

The unit will be one of the most prestigious in Whitehall and senior officials will be drafted from a series of other departments, such as health, education and employment, environment and the Home Office, to co-ordinate the drive.

Mr Mandelson, who as a minister in the Cabinet Office has been closely involved in planning the unit, will today pledge that Labour will not tolerate a society in which "a significant minority at the bottom of the social ladder, who are at best on the edge of the labour force", continue to be excluded from opportunities.

Ministers believe that if the unit succeeds it will serve the dual purpose of easing social divisions and crime while in the medium to long term also make savings in the huge benefits bill. It is intended to complement the Welfare to Work programme announced in the budget by the Chancellor of the Exchequer, Gordon Brown, which will be funded by the pounds 5bn windfall tax. But the unit's work also reflects a shift in the role of the Cabinet Office as a central department working directly to the Prime Minister.

Among the target groups identified by ministers are the 5 million families where no one of working age is employed, the 3 million people living on the 1,300 worst housing estates in Britain and the 3 million people who remain in the bottom 20 percent of the income range for four years in succession. Other target groups, beside the unemployed 18- to 24-year- olds, include low achievers who leave school without qualifications and the young homeless.