Searching: Job scheme under fire

Many young people helped into work by the government's New Deal scheme would have found work anyway, a report suggested on Thursday.

The report, by the National Audit Office, found the government had beaten its target of helping 250,000 people into work, as 339,000 were helped through the New Deal by October 2001.

But the NAO estimates that as few as 8000 would have remained unemployed without the flagship scheme. Of those people who left the New Deal, the destinations of 30 per cent were unknown although research suggests that around half of these found work.

Head of the NAO, Sir John Bourn, said the scheme needed to learn to adapt, particularly to an increase in the number of claimants with poor numeracy and literacy skills, while the effectiveness of New Deal must be assessed.

"The programme must continue to evolve to meet the needs of the increasing proportion of clients with severe or multiple barriers to employment and the changing economic climate," he said.

"In particular, they must evaluate the changes introduced to the programme to ensure that it continues to help these vulnerable young people and provide good value for taxpayers' money."

Conservative MP for Gainsborough and chairman of the public accounts committee, Edward Leigh, said: "The New Deal's achievements for unemployed young people are actually less impressive than the headline figure suggests.

"The New Deal's actual achievements in increasing employment have been at a net cost to the taxpayer of some £140 million a year, which amounts to paying at least £5000 each year for each additional person in employment."

However, minister for work Nick Brown said that the government was continually working to increase employment.

"We are determined to provide even more help to people who face the greatest barriers to finding work," he said.

Dr Vince Cable, the Liberal Democrat shadow DTI secretary, claimed media hype had run ahead of delivery.

"The New Deal has proved to be a costly scheme. While a lot of resources have been put into the New Deal to create a small number of genuinely new jobs, there is still a large 'reserve army' of millions of mainly older male workers who would like to work and are able to work, but who have dropped out of the labour market. They badly need help through anti-discrimination legislation to overcome resistance to hiring older workers; and assistance with retraining," he said.