As part of the comprehensive spending review, a White Paper, Public Service for the Future, has been published with targets for all Government departments.
The DFEE has been told its aim is "to give everyone the chance, through education, training and work, to realise their full potential and thus build an inclusive and fair society and a competitive economy".
Education Secretary David Blunkett must also ensure his department raises its productivity. He will have to make efficiency savings in further and higher education and the employment service and achieve his performance targets within an agreed sum.
He must increase the number of DFEE documents on the Internet and reduce sickness levels.
Stephen Byers, Chief Secretary to the Treasury, said: "The old days of throwing money at a problem and hoping that it goes away have gone. So has the slavish adherence to the belief that market forces can deliver the public services that people want.
"Our approach is to ensure that the extra investment we are putting into public services achieves real improvements, that standards will be raised and the quality of services enhanced. By setting measurable targets backed up by annual reports we shall be ensuring the public knows exactly what progress we are making to achieve these ambitious."
The DFEE's performance targets are to:
* increase nursery places for three-year-olds from 34 per cent to 66 per cent by 2002; * reduce the number of children in infant classes of more than 30 from 477,000 to zero by September 2001; * ensure 80 per cent of 11-year-olds reach the required level of literacy and 75 per cent in numeracy; * reduce truancies by a third; * increase the proportion of 16- year-olds with one or more GCSE grades A*-C from 92 per cent to 95 per cent by 2002; * increase the proportion of 16- year-olds who achieve five or more GCSEs from 45 per cent to 50 per cent by 2002; * increase the proportion of those aged 19 to have achieved the national vocational qualification level 2 or equivalent from 72 per cent to 85 per cent by 2002; * get 250,000 under-25s off benefit and into work by May 2002.
The Office for Standards in Education will also have to meet a set of performance targets to:
* inspect 20 per cent of schools during 1999-2000; * inspect 8,000 nursery placings during 1999-2000; * inspect 26 local education authorities in 1999-2000, rising to 30 in 2000-01; * review 91 per cent of inspection reports in 1999-2000; * target cost of contracted inspections in 1999-2000: Pounds 54 million, compared with out turn expenditure of Pounds 107m in 1997-98; * to produce 200 secondary and 40 primary subject inspections during 1999-2000 for initial teacher training.