The reforms of young people's services contained in the forthcoming youth green paper will be paid for by reorganising the funding of existing services rather than a significant investment of new money.

Last week, Education Secretary Ruth Kelly told Parliament's Education and Skills Select Committee: "We have got enough funding in the system to meet the needs of every child once we turn the system around. There is a lot of potential for making the system work better."

The Department for Education and Skills is under pressure to cut costs by reducing staff numbers by a third by 2008. But Kelly said this would not have an impact on services.

Committee member Jonathan Shaw, Labour MP for Chatham and Aylesford, asked what the Government will do for youth services. "You've done a lot for children and families, but what about youth?" he asked. "This has been a Cinderella service for too long."

Kelly said the youth green paper would address the problem. She said there would be an emphasis on "things to do, places to go" and that young people would be given a say in the activities that are on offer.

She also added that extended schools would be central to the plans, but refused to be drawn on when the green paper would be published.