The Government changed the rules governing Arts Council grants from the lottery’s good causes fund in April. The council - which last year distributed Pounds 300 million of lottery money to 522 organisations - will be able to provide cash for non-capital projects. It will also have to consider whether an application for funds develops talents and skills, particularly of young people.

Now the Arts Council has published a consultative document on its plans for working with the new criteria. In the introduction, its chairman, Lord Gowrie, writes: “Over the next few months a range of new Lottery programmes will be drawn up - on commissions for new work, access to and participation in the arts and enhancing the creative abilities of young people in particular. This is probably the most significant change in the funding of the arts in Britain since the council was founded 50 years ago.”

The document says that arts education will include such initiatives as artists-in-residence and schemes to bring students to theatres and galleries. One aim is to expand opportunities for contact between the arts and those in education; another is to get arts organisations to develop their educational work to the highest possible standard.

Lottery funds could also support youth arts outside education. “These might include youth groups, possibly bringing them together with professional practitioners; summer schools, Saturday schools and masterclasses; and youth-led groups or initiatives.”

A study by the National Foundation for Educational Research last year found that less than a third of young people were involved in imaginative or creative activity, while two-thirds would welcome more arts involvement.

The Arts Council hopes that a programme could build on existing good practice in schools, colleges and youth organisations. It would be targeted at deprived areas, and would encourage innovation and experimental initiatives and the creation of stepping stones to professional involvement in the arts and cultural industries, through support for training.

The council says that the programme should reach young people with little experience or involvement in the arts, enhance educational opportunities (by offering alternative routes to vocational qualifications, for instance) and encourage entrepreneurial initiatives.

Organisations eligible for grants would include education establishments taking on new and extended programmes, youth service agencies, amateur, voluntary and community groups, professional arts companies and arts education organisations.

Questions for consultation, which closes on July 15, include whether the broad approach and inclusive view of young people, art and culture is acceptable. The document asks what the spending priorities should be, whether the upper age limit should be 26 or 30, and whether the balance between existing practice and new approaches to young people is correct.

It also asks: “The element of risk-taking involved in funding innovative and experimental initiatives involving young people would be greater than hitherto regarded as acceptable. Would this be justified?” The Arts Council intends to get pilot schemes under way this year, although it is unlikely to be able to launch full-scale programmes until the next financial year.

Submissions should be sent to Graham Hitchen, Corporate Policy Director, The Arts Council of England, address as above.