A new Whitehall unit to step up the onslaught on child poverty will have to work closely with the Holyrood government if it is to succeed, the head of the Child Poverty Action Group (CPAG) in Scotland said yesterday.

Peter Hain, Work and Pensions Secretary, announced the new inter-departmental unit in the wake of criticism that the pre-Budget report came up with only 48p per week for poor children through increased tax credits while targets to eradicate the problem were receding.

John Dickie, the head of CPAG Scotland, said: "The commitment to halve child poverty by 2010 and eradicate it by 2020 is the UK Government's most important promise to voters. We welcome the new cross-departmental unit and the Secretary of State's recognition that progress on child poverty is too slow to meet the targets.

"But it is important that this new unit works closely with the Scottish Government which also has a vital role to play in ending child poverty."

He said that removing the jobs barriers such as lack of affordable childcare, and ensuring parents get the advice they need to access their full benefit and tax credits entitlements are key areas where Scottish ministers need to act.

Mr Dickie added: "We also understand that there will be no Treasury officials within the new unit. This is a real concern as the Institute for Fiscal Studies suggests around £4bn annual investment is needed to meet the 2010 child poverty target.

"That investment is crucial to restoring public trust in the UK Government's commitment to the targets and must now be made in next year's Budget."

Mr Hain reaffirmed Labour's commitment to halving the number of children living in poverty by 2010, but accepted that more needed to be done and insisted the new Child Poverty Unit would help break the cycle of poverty for many more youngsters.

While official figures show that 600,000 children have been lifted out of poverty since 1997, Labour MPs and independent experts have warned the government it must accelerate progress towards its goal of eradicating child poverty by 2020.

Independent policy adviser Lisa Harker, who was asked to review the government's child poverty strategy in 2006, said: "The government has set itself an ambition and it is not yet on track to achieve that ambition. It will not make its 2020 target on current progress."

The new unit will feature officials from the Department for Work and Pensions and the Department for Children, Schools and Families. It will work with local government and agencies to co-ordinate efforts to eliminate child poverty.

Martin Narey, chief executive of Barnardo's, said there was an economic case for ending child poverty.

"Research in the US shows that the failure to tackle child poverty there, in additional health and criminal justice costs and in reduced tax revenues, amounts to 3.8% of American GDP or $500bn every year," he said.