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40% of New Deal jobs don’t last, says Select Committee report


<img src="/sites/default/files/siftmedia-photolib-logo_newdeal.jpg" border=0 alt="New Deal" A Select Committee report published this month into the New Deal scheme reveals that around 40 per cent of New Deal candidates fail to find employment lasting longer than 16 weeks.

The Select Committee last undertook a review of New Deal two years ago. They were particularly keen to review progress now, as data covering first full two years of the New Deal for Young has become available, and also because they expect that unemployment in general and New Deal in particular will be important issues in the forthcoming general election. Sustainable employment is a key concern for the Committee, who expressed concern that job retention and career development were not being given attention or being measured.

By the end of November 2000, there had been 568,400 people beginning New Deal. The report states that of these, 206,530 have moved into a job lasting more than 13 weeks and a further 62,680 have had at least one period of employment lasting less than 13 weeks. A key finding of the report is that around 22 per cent of participants who have found a job through New Deal do not remain in sustained employment. The figure increases to nearly 40 per cent when taking into account the fact that some participants may start more than one job before finding sustained employment. Both the Unemployment Unit and Youth Aid and the Centrepoint charity expressed concern to the Committee about this. The Committee stated that there was some support for the idea of using 26 weeks rather than 13 as the point at which placements are measured.

The report also looked at the figures for cost per job, an area which has been the focus of much debate. The report notes that although official government figures put the cost per New Deal job at below £4,000, other figures from the Centre for Policy Studies suggested the correct figure was £11,333 and could be as high as £37,000, the variation being due to different assumptions over what factors should be included in the calculations. The select committee adds that they are interested in seeing the results of the forthcoming study from the National Audit Office.

The report recognises that evaluating the New Deal is complicated by the fact that it is difficult to isolate the effects of New Deal from other influences, such as economic growth and other welfare to work policies such as the introduction of the National Minimum Wage. Looking at what would have happened if New Deal hadn't been put in place doesn't make assessment any easier, says the Committee, as there is no obvious group to compare those taking part with. The report also stressed the need for personal advisers to develop stronger relationships with employers if they were to increase the proportion of clients placed into sustained employment.

Employment Minister Tessa Jowell defended the figures, saying: "The number of jobs not lasting is inflated by the fact that some new dealers try out two or three jobs before settling on something permanent. We see the same phenomenon with university graduates so this is in line with the youth labour market in general. The important thing is that 75 per cent of employed New Dealers are in sustained jobs and an estimated 400,000 young people have so far got a job through the New Deal."

The Committee also expressed concern that there had been little take-up of New Deal within the Civil Service itself - by October 1999, only 675 New Deal for Young People participants had been employed in the Civil Service and over half—63 per cent—of the these had joined the DfEE. Tessa Jowell said that the proportion of Civil Service participation was more a reflection of the strong take-up of New Dealers by the private sector.

The report concludes that although the New Deal should be measured by an increase in employment, many New Deal participants need extra support to get established in the job market and this factor should be taken into account when looking at the success of the scheme. Ms Jowell said the Department would respond more fully to the Committee’s detailed recommendations in due course.


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