News

The chancellor this week promised to increase annual spending on public services by £61bn by 2005-6 - but insisted that the resources must be matched by reform and results.

Announcing the outcome of the government's third comprehensive spending review, Brown unveiled a £1.5bn combined budget for childcare, early years education and Sure Start by 2005-6 to be managed by a new inter-departmental unit based within the Department for Education and Skills. Baroness Ashton, who is currently junior minister for early years and school standards, will take on the new role of minister for Sure Start, early years and child care.

The extra funding will ensure the creation of at least 250,000 extra child care places, and an expansion of Sure Start to 400,000 young children, including 50 schemes in rural areas and pockets of deprivation.

It will also fund the creation and operation of children's centres, enabling an additional 300,000 children in disadvantaged areas to access health, social care, education and other services alongside some of the new child care places.

The voluntary sector was another beneficiary of Brown's spending spree. The chancellor announced the creation of a new investment fund worth £125m over the next three years to help overcome barriers to effective service delivery, increase the scope and scale of voluntary sector services, and modernise the sector. The money comes on top of the £188m already promised to the Home Office's Active Community Unit over the next three years.

Resources were also allocated to the neighbourhood renewal fund, which will rise from £300m this year to £525m in 2005-6. In addition, budgets for England's nine regional development agencies will rise from £1.6bn this year to £2bn in 2005-6 to boost work on driving forward economic development and regeneration in the regions. Reward grants worth a total of up to £635m over three years for local authorities that achieve stretch targets set out through local public services agreements will also be made available.

The Home Office budget will rise from £10.7bn this year to £13.5bn in 2005-6, with some going towards speeding up reforms to the asylum system and crime reduction.

But it was education that received the biggest boost this week: a real terms increase of 6 per cent per year for the next three years.

Within that, income-related education maintenance allowances worth up to £1,500 per year will be available to all 16 to 19-year-olds from lower income families from September 2004. Money will also be invested on pupil behaviour.

But there are strings attached to all this new cash. The chancellor countered his generosity with an emphasis on inspections and targets, including a new round of departmental public service agreements and the creation of the new health and social care inspectorates, a single housing inspectorate, and a reformed criminal justice system inspection regime.

Health secretary Alan Milburn will "shortly" be making an announcement on how the extra resources for social services will be spent. However, the new PSA signed by Milburn suggests that he will need to devote at least some of it to mental health services for both adults and children, home care services for older people, drug treatment services, and services for looked-after children and care leavers.

Key targets

Department of Health

- Improved access to crisis and child and adolescent mental health services.

- Increasing the number of older people supported intensively to live at home.

- Narrowing the gap between the proportions of children in care and their peers who are cautioned or convicted.

Home Office

- Reduce reoffending among young offenders by 5 per cent.

- Reduce the use of illicit drugs among all young people.

- Ensure by 2004 that 75 per cent of substantive asylum application are decided within two months.

- Increase voluntary and community sector activity by 5 per cent by 2006.

Department for Education and Skills

- Reduce truancies by 10 per cent compared with 2002.

- Improve the basic skills of 1.5 million adults by 2007.