LONDON - Millions of pounds worth of government money has failed to stop a new generation of teenagers from the poorest homes leaving school with nothing to show for 11 years of compulsory schooling.

A damning report obtained by The Independent newspaper shows that Britain's most deprived boroughs are still failing to make inroads into the number of youngsters quitting with no GCSE passes.

Indeed, the 35 education authorities considered the poorest are making the least progress of all 350 UK authorities in reducing the figures.

That then has a knock-on effect for school-leavers' employment prospects. They can spend a lifetime struggling to find a job, it argues.

Many of the 35 boroughs have made little progress at all. In fact, in four of the 10 most deprived areas, the number has increased over a four-year period.

The report was commissioned from the London School of Economics by the Prince's Trust - Prince Charles' inner-city charity.

The figures show the number of youngsters quitting with no GCSE passes in Knowsley, Merseyside - the most disadvantaged borough in the table - had grown in the four years from 1999 to 2003. They had gone up by 53 from 11.1 per cent to 11.3 per cent.

The other three boroughs to suffer a similar fate are: Manchester, up by 915 from 5 per cent to 7.5 per cent; Nottingham up 60 to 6.8 per cent; and Kingston-upon-Hull up 138 to 7.1 per cent.

The lack of progress comes despite millions being pumped into these areas to improve standards. The Excellence in Cities programme has spent at least £800m over four years on providing mentors for struggling pupils and master-classes for the brightest pupils trapped in deprived communities.

However, the report shows few of the 35 authorities have managed to pull themselves out of the bottom 10 per cent in that period.

Twenty-nine of the top 35 most deprived areas in 2004 were also in the top 35 in 2000. The report says: "The groups at risk of social exclusion and some of the communities in which they live have not benefited [from improvements in living standards, health and general prosperity] as much as others.

"As a result, they have fallen behind the rest of the population. "Improvements in the educational outcomes in many 'hardest to reach' areas are still below the national average."

The report is blunt about the job prospects for the unqualified: "Forty-four per cent of men who leave school with no qualifications fail to acquire any qualification later in life," it says.

"Men with no qualifications have a 68 per cent employment rate compared with a 75 per cent rate for those with a basic level-one vocational qualification [the lowest form of qualification].

Very few people who leave school without qualifications are afforded the opportunity to get very far, or indeed anywhere, on this vocational ladder."

Professor Alan Smithers, of the Centre for Education and Employment Research at Buckingham University, said: "Schools in these areas are dealing with the most challenging pupils and they also find it hardest to recruit and retain teachers. It could be that you're dealing with a pretty intractable problem - a hard nut to crack."