'Trust fund' for children in care

Children in care could receive a government "trust fund" of several thousand pounds on reaching adulthood, under radical plans to transform the lives of Britain's most deprived youngsters.

Children in care could receive a government "trust fund" of several thousand pounds on reaching adulthood, under radical plans to transform the lives of Britain's most deprived youngsters.

The scheme would pay child benefit for those in foster care or council homes into a special account and they would be entitled to spend it on education or training when they reached the age of 18.

At present, child benefit for so-called "looked after" children goes straight to the Treasury because they have no one to spend the money for them. With child benefit now at a record high of more than £15 a week, a child who spends several years in care would be entitled to thousands of pounds on maturity. A child who is in care for five years would receive a lump sum of nearly £4,000.

One option would be to tie the money to education and training specifically, but it is possible that the trust fund could also be spent on housing.

Gordon Brown, the Chancellor, is understood to be very keen on the idea and will meet officials to discuss it when he returns from his honeymoon this week. The "trust fund" plan already has the backing of the National Children's Bureau, a leading lobby group for those in care, and Labour's most senior local government leaders.

The scheme's backers within the Treasury and the Department of Health claim it would give real meaning to Tony Blair's promise to eliminate child poverty in 20 years.

The plight of children in care is also a priority for the Government and ministers are disturbed that such people often end up homeless or in prison. The most recent figures show that more than 75 per cent of care leavers have no qualifications and up to 80 per cent leave care with no job to go to.

Graham Lane, the chairman of the Local Government Association's education executive, said it was time to end the "absurd situation" that prevented young people in care from claiming child benefit. "By opening trust funds, looked-after children would get the chance to invest in their future education and employment. This may go some way to tackling the plight of many youngsters leaving care who end up on the streets," he said.

"Some people say that there are practical difficulties to doing this, but I just say that we have got to at least try. We can find a way if we want to... These kids leave care with nothing. I think it is our moral duty to them as well as to society as a whole to give them the money to which they are entitled."

Mr Lane said the trust fund could be spent on training courses, deposits for rent or even as a contribution towards buying a home.

Most of the 55,000 children in local authority care are looked after by foster parents, with only 9 per cent in residential homes. Children who stay in care are four times as likely to be jobless, 60 times as likely to be homeless and go on to make up one-quarter of the adult prison population.

The idea of the trust fund, which would be the first of its kind in Europe, is seen by some in the Treasury as the best means of giving the deprived a good start in adult life.

Ministers are also looking at proposals to extend educational maintenance allowances to those 16-year-olds who are in homes or fostered and still in full-time education.

William Hague will attempt to seize the initiative on youngsters in care this week when he announces the Tories' proposals to make adoption easier and to part-privatise children's homes. Under the plans, a draft Adoption Bill would create a national register for fostering or adoptive parents, ending the system of local councils deciding on individual cases. Every child who has been in care for more than 12 months will have an adoption plan. All will have access to a body such as a charity or church, to widen their social outlook.

Most controversially, the Tories will legislate to encourage councils to transfer care homes from their management to that of a charity or church organisation.

Mr Blair has already announced that the Government wants to remove the obstacles to adoption, but ministers are likely to attack any moves to privatise children's care.