My new book, Left Behind, is about communities that are neglected by government and spiral down into anger and despair. It shows that in Britain, since the arrival of Thatcherism, entire communities have been left humiliated, facing problems that have hardened into wrecked life-chances: young people born into distressed communities have much worse chances of future success than those born into privilege.

The roots of this grim social divide lie in Britain's distinctively dysfunctional bureaucracy which is exceptionally centralised in the Treasury. Worse, the Treasury is exceptionally short-termist - pinching on investment. Worst, it is exceptionally confident and socially exclusive. Its confidence leaves it unwilling to question its own thinking. Its social exclusivity, stark even by the standards of other Whitehall departments, leaves its staff detached from distressed communities. Between them, confidence and exclusivity frustrate the normal process by which an organisation learns from its failures.

Our neglect of the public investment in the skills that young people need to equip them for a productive life is a key aspect of these failures. Compared to Europe, these investments are highly skewed in favour of the affluent.

Our most fortunate youth attend some of the finest prep-schools in the world. This equips them to enter the finest private schools in the world. Being classified as charities, both types of school are untaxed: they are too often charities for the affluent. An equivalent selection-by-wealth works in the catchment areas of the top state schools: richer households outcompete the poor for houses, amplifying social segregation. Since only most affluent British households can afford either of these routes to privilege, their places are increasingly taken by the children of affluent foreigners.

The minority of British children fortunate enough to attend top schools, then continue to the finest government-funded universities in the world. We have 18 of the world's top 100 research universities, far ahead of any other country in Europe. But because the Treasury refuses to invest in the most skill-intensive courses like medicine, our superb medical schools are underused. We should be training more specialists and doctors that the NHS needs. We could help the many poorer societies that are less well-endowed with doctors than our own. Instead, we now train less than half the doctors that the NHS needs. In contrast to medicine, clever kids who want to become lawyers can get degrees in law that are heavily subsidised by government because the training is cheap. As a result, we have a surplus of young people with law degrees alongside a shortage of those with degrees in medicine.

At the other end of the social spectrum, youths less fortunate miss out. Government provision for pre-school is inferior to that in comparable European countries. A crucial stage of disadvantage is the passage from primary school to secondary. Tests of children's abilities at that stage reveal the bright kids from poor households are overtaken by less-bright ones from affluent households. For example, In the GCSE maths exam, kids graded in the top third have a 70% chance of continuing to a degree, whereas those in the bottom third have only a 4% chance.

So, who gets the good grades? Those who have gone to fee-paying schools for their GCSE studies have a 70% chance, while those in the most deprived fifth of households have only a 17% chance.

Those who fail to get a degree are at a severe lifetime disadvantage: Britain has a dearth of opportunities for vocational training. There are few pathways to the skills that elsewhere successfully interest many young people: such as becoming an electrician or a heating engineer.

The number of people in apprenticeships has collapsed. Other countries give all young people a lifetime allowance which can be used for a wide range of vocational or degree courses. Our governments have never risen to this as a priority.

Left Behind opens with such angry critiques - I think justifiably. But most of the book is hopeful and constructive. It reports many inspiring examples of communities around the world that were once distressed but have been able to catch up.

Deprived and barely literate 10-year-olds in Rotherham have been transformed into capable, confident writers; Sheffield Hallam was transformed into a top-performing university that trains local youth in a wide range of valuable vocations; and leading education ministries around the world are experimenting with approaches that will equip all their youth for the 21^st century, while our own is self-satisfied.

It's time for whoever forms the next government to adopt some of the practical and tested ideas at the heart of these initiatives, in order to give young people a credible prospect of a fairer future.

Professor Sir Paul Collier is Professor of Economics and Public Policy at Oxford University's Blavatnik School of Government and the author of Left Behind: A New Economics for Neglected Places.