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New Deal is a ‘costly flop’ say MPs

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The New Deal scheme, the government initiative to help young people find work, is ending up with too many short-term posts and is costing tax-payers upto £11,000 per job according to a report by MPs.

The report, 'New Deal for Young People Two Years On' by the House of Commons Select Committee on Education and Employment expressed concern that jobs created only lasted for 13 weeks.

The report went on to say that the scheme had too many people going through the system twice, with a break in the middle when the trainees spent time on the dole.

One MP reported that 60% of the trainees would have found jobs without participating on the programme.

The report was also critical of the public sector for not offering more jobs through the scheme.

In an interview with HR Zone last week the Chartered Institute of Personnel and Development (CIPD) Head of External Affairs, Nick Isles, said that the scheme was a success and was being closely watched by the rest of Europe as a model scheme.

Meanwhile, Employment Minister Tessa Jowell yesterday welcomed early independent research findings which show that the New Deal has had a significant favourable impact on the jobs market. The National Institute for Economic and Social Research are presenting their findings this week to the Royal Economic Society conference.

Speaking yesterday Tessa Jowell said:

"This Government was elected on a commitment to put an end to long-term youth unemployment as a matter of national priority - and with over 216,000 young people already helped into work through the New Deal we are well on the way to doing that. However, this has been achieved by hard choices and sustained investment in a generation of young people, many of whom face substantial disadvantage in looking for jobs. We always believed that the up front investment the New Deal required would be one of the wisest any Government could make. But these early findings from independent professional researchers suggest the New Deal has been a resounding success.

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