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The first minister said he expects to see an improvement in literacy at schools after standards were criticised by Wales' inspection service.

Carwyn Jones said the Welsh government had launched national literacy and numeracy programmes.

He faced questions after inspectors Estyn said a fifth of children were functionally illiterate when they arrived at secondary school.

But Mr Jones said reforms for the under-sevens had won praise.

At his weekly question time in the Senedd, he said he was confident the literacy and numeracy programmes would improve the figures contained in Estyn's annual report.

The report says 20% of children start secondary school with a reading age below nine years and six months - generally considered the level of functional literacy.

'Damning indictment'

Plaid Cymru leader Ieuan Wyn Jones said the statistic was a "damning indictment" of the Welsh government.

The first minister pointed out that Estyn's report covered a period when Plaid was in coalition with Labour.

But the Plaid leader said Welsh Labour ministers had held the education portfolio for more than 12 years.

Welsh Liberal Democrat leader Kirsty Williams said Estyn had repeated criticisms it made last year.

She said: "When hospitals fail you tell this chamber it's the fault of the local health boards.

"When our schools fail you try to blame it on the local authority, you try to blame it on schools, you try to blame it on the head teacher, you just tried to blame it on Ieuan Wyn Jones - anybody but your own government."

Mr Jones said extra funding for children from less well-off backgrounds - part of a budget deal agreed between Labour and the Lib Dems - would help pupils reach the desired standards.

Estyn had praised the foundation phase for the under-sevens, said performance in most schools was mainly good and welcomed an improvement in well being, he said.

"Yes there are areas where there needs to be improvement, but let's not suggest everything is difficult in terms of education in Wales," he said.

Education Minister Leighton Andrew had laid out a 20-point plan, he said, adding: "So yes, next year, I expect to see improvement."

Also at first minister's questions, Welsh Conservative leader Andrew RT Davies said Labour had failed to nurture the private sector, pointing to a declining rate of business start ups.

But the first minister said his administration was fighting a "tide of indifference from the UK government".