new deal

How successful has the New Deal programme been for the long term unemployed in the UK? Can Labour now claim that its manifesto commitment of getting 250,000 off the unemployment register has been achieved? How costly has the New Deal Programme been in getting people back into work?

Labour's New Deal programme for young unemployed people was introduced across the UK in April 1998. In June 1998 the Government launched a separate New Deal for Long-Term Unemployed People aged over 25+.

Over two years later we are starting to see some of the effects of these active labour market policies on the UK economy.

New Deal Gateway and Options

People enter New Deal by moving into a Gateway where they are given an interview and support in choosing a suitable option.

The main options are (i) a subsidised job with an employer (ii) remaining in full-time education and training (iii) work within the accredited voluntary sector and (iv) work experience with an environmental task force.The fifth option of staying on benefits has been taken away!

The programme is designed to provide pathways back into work for the long term unemployed - many of whom have become outsiders in the labour market despite the continuing strength of the British economy. Higher levels of employment and economic activity add to total national output and should help to improve the overall performance of the labour market in sustaining long run economic growth.

Is the New Deal delivering?

Data on New Deal participants published in the autumn of 2000 showed that up to the end of July 2000, over 518,000 people had passed through the New Deal scheme, 402,000 have left leaving 116,000 currently on the programme. 237,040 young people had entered employment. Of which 180,600 were in sustained jobs, and 56,440 in jobs lasting less than 13 weeks. 79,000 companies have signed up to the New Deal programme.

Latest Stats

Breakdown of the numbers of young people going into the four options.

1. 186,080 young people into sustained jobs and 58,370 other jobs up to the end of June.

2. 38,500 have started work in the Voluntary Sector.

3. 36,600 have started work on the The Environment Task Force.

4. 81,200 are training on the Full Time Education and Training option.

There are wide differences in the success rate in getting New Deal participants into work across the regions. Just over one third of participants among 18-24 year olds have moved into employment but in some cities (including Birmingham) the percentage is only 25%.

The New Deal programme for workers aged 25+ has been running for a shorter time period. Nonetheless less than 15% of participants have moved into employment. In some areas (Glasgow for example) only one person in ten has passed through the programme into either a subsidised job or non-subsidised employment.

New Deal has improved the job prospects of many thousands of long term unemployed - many of whom were at risk of total detachment from the labour market. Undoubtedly these schemes are quite costly - but so are the potential economic and social costs from hundreds of thousands of people remaining outside the world of work.

 

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