A Cabinet minister will be put in charge of tackling social exclusion, Tony Blair has told the Scottish Labour conference.
Mr Blair believes more needs to done on social exclusion
Mr Blair said progress had been made but in too many cases unemployment and other problems were handed down from one generation to the next.
"This is not a caring country while we allow such hopelessness to go unchecked," he said.
The Conservatives accused Mr Blair of using an old idea to grab headlines.
Mr Blair promised a Cabinet minister to bring together work across government on tackling the plight of excluded people in England.
It is not thought there will be an extra minister at the Cabinet table - instead the post of chancellor of Duchy of Lancaster is likely to be redefined.
The post has been vacant since last November when John Hutton replaced David Blunkett as Work and Pensions Secretary.
Downing Street say the announcement of a new exclusion minister does not mean a reshuffle is imminent.
But Home Office Minister Hazel Blears has long been tipped for promotion to the Cabinet.
There is already a Social Exclusion Unit, which originally reported directly to Mr Blair but moved to be part of the Office of the Deputy Prime Minister in 2002.
WHAT IS SOCIAL EXCLUSION?
The government says it is about more than wage levels
It happens when people or places suffer from problems such as unemployment, discrimination, poor skills, low incomes, poor housing, high crime, ill health and family breakdown
People can be trapped in a vicious cycle when such problems combine, says ministers
Being born into poverty or having low-skilled parents can affect life chances, they say
The Tories said Mr Blair had appointed a minister for social exclusion before - Mo Mowlam held the post as part of her Cabinet brief in 1999.
Tory shadow local government secretary Caroline Spelman said: "We welcome any genuine step to help the disadvantaged in our society.
"But I fear this is yet another attempt by Mr Blair to grab the headlines with a quick fix, reheating announcements he's made before."
Liberal Democrat spokeswoman Sarah Teather said she would welcome the post if it meant the government was taking exclusion seriously.
"Sadly, Labour's record so far has been one of increasing exclusion," she said, pointing to unfair taxes, waiting lists for council housing and concerns about education.
SNP leader Alex Salmond said: "This lacklustre speech only demonstrates that this is a prime minister with no new ideas and nothing left to say. Nine years into government he's simply running out of steam and looks like he's given up."
In his speech to the conference in Aviemore in the Highlands, Mr Blair said Labour had changed people's lives, giving them a decent living wage through tax credits.
But he went on: "For some, those who from generation to generation are brought up in workless households in poor estates, often poorly educated and frankly sometimes poorly parented, the rising tide has not helped lift them.
"We intervene too late. We spend without asking how effective is the spending.
"These are the children who are the clients of many agencies of government but the charges of no one - prey to drugs, to crime and anti-social behaviour, lacking in self-belief, lacking a basic stake in the society into which they are born.
"It isn't good enough."
It is Mr Blair's first trip to Scotland since Labour lost the Dunfermline and West Fife by-election.
He praised Scotland for leading the way on issues such as banning smoking in enclosed public spaces and improving school meals.
With Scottish Parliament elections due next year, he attacked the Tories as "incoherent" and the Lib Dems as opportunistic.
And he hoped the elections would see the SNP defeated to show Scotland had turned its back forever on "the damaging deception that is Scottish separatism".
In a signal he does not intend to step down as prime minister soon, Mr Blair told delegates there were still many important political challenges.
Earlier, the deputy general secretary of the Amicus Union, Tony Dubbins, said a "timetable" for Mr Blair to step down needed consideration.
"Something has to be said at the forthcoming Labour Party conference in October to ensure that that party leader is in place a couple of years before the next general election," he told BBC Radio 4's Today programme.