Blair picks poverty hit team

Tony Blair has appointed one of John Major's favourite civil servants to head his new Social Exclusion Unit - a team of experts and civil servants set up to find new ways of reintegrating Britain's underclass into the mainstream.

She is Cambridge and Harvard-educated Moira Wallace, a 36-year-old Treasury meritocrat who worked closely with the former Tory leader when he was Chancellor and again when he became Prime Minister. She was awarded the OBE in Mr Major's resignation honours list, one of the few civil servants in a predominantly political field.

But Ms Wallace, currently economics private secretary to Mr Blair, proved her adaptability on 2 May when she joined the civil servants lining the entrance to Number 10 applauding the arrival of the Labour leader. She is said to have taken quickly to New Labour's "informal" style and her sense of fun is said to have endeared her to the Blair entourage. Her appointment will be announced when the 10 other members have been selected.

Peter Mandelson, the Minister without Portfolio, described the unit as "the most important innovation we have made since coming into office". And if it has a long way to go to end poverty and social disadvantage, it has already succeeded in becoming the hottest ticket in Whitehall.

Mr Blair's senior policy adviser, Geoff Mulgan, has been sifting through mounds of applications. The unit is his brainchild, foreshadowed in papers published by Demos, the think-tank he directed until May.

Mr Mulgan has identified five candidates from the civil service. These include health and social security specialists. One possible recruit is one of the very few black mandarins, Sharon White, who recently joined Number 10 after serving in the British Embassy in Washington.

The other five members will come from outside government ranks. Among those under consideration are a police officer, an academic housing specialist and a business executive nominated by Business in the Community.

The unit will answer directly to Mr Blair who will set up a new cabinet committee to secure cross-department co-ordination. The unit's formation has been strongly backed by the Education and Employment Secretary, David Blunkett, and the Home Secretary, Jack Straw.

It will draw on previous Whitehall initiatives. The permanent secretaries' committee, a conclave of top officials, has been considering social exclusion for several years and has identified many of the problems of co-ordination. Failure to "bash heads together" was the reason the Joint Framework for Social Policy, a bid to link community development and anti-poverty policies by Labour in the mid-1970s, came to grief.

Ms Wallace is said by colleagues to be "very sharp, but approachable". "She can be tremendous fun though you are always aware that behind an easy-going exterior hides a very sharp mind."

She is said to see the core of the job as "making government work better". However this may mean turning on her former colleagues in the Treasury, for example trying to persuade them to invest more in child care now to forestall high spending on crime and delinquency later.

Her main task will be to focus on 1,370 housing estates, most of them council owned, where crime is high and unemployment is rife, especially among younger men. A measure of its success - it is being given two years to run - will be whether there is a drop in the proportion of households in these areas where no one is in paid work.

The unit will be examining ways - including parenting programmes - in which child care can be improved to cut the "cycle of deprivation" as the social rejects of one generation give birth to those of the next.

Special attention will be paid to crime. One scheme, proposed by Mr Mulgan, is for residents of estates to be given money to employ their own police, recruited locally - this is seen as a way of cutting unemployment as well as increasing security.