Labour's New Deal a 'moderate' triumph

This was New Labour's Big Idea. No longer would the unemployed be the victims of half-cocked, half-baked employment schemes. Real money would be spent on a quality programme.

This was New Labour's Big Idea. No longer would the unemployed be the victims of half-cocked, half-baked employment schemes. Real money would be spent on a quality programme.

However Tony Blair's "third way" also meant people would not be allowed to languish on the dole. No longer would a Labour Government be seen as a soft touch. The carrot was a "quality" job; the stick, withdrawal of benefit; and the political result, ever-lasting kudos for the Government.

Yesterday, ministers trumpeted the programme's success, having received data for New Deal's first two years. Equally predictable was the publication of the Conservative Party's report "Seven Failures of New Deal", arguing that the taxpayer got little in return for more than £3bn.

More measured was the response of the Joseph Rowntree Foundation, which described the success of the flagship policy as "moderate".

The foundation points out that many people taking part would have found work anyway. The Commons education and employment committee this week argued that each New Deal job cost considerably more than the £4,000 estimated by the Government. Graham Brady, a Tory member of the committee, put the figure at £11,000, because most of the employment would have been created anyway by the booming economy.

The Rowntree study said almost 440,000 young people have been on the scheme since it was launched nationwide two years ago, with a third finding jobs that lasted for more than three months.

The Commons committee calculated that a quarter of those who obtained jobs through New Deal were out of work within 13 weeks.

The report from Rowntree found that the part of the programme aimed at the long-term unemployed was less successful than the scheme aimed at young people. Of the 238,000 long-term jobless who have been on the programme, just 13 per cent found jobs that lasted more than 13 weeks.

Professor Jane Millar of Bath University, who wrote the report, said in their early months, schemes had a positive impact on a range of workless people partly because they were assigned a personal adviser.

"Nevertheless, the programmes have generally been better at serving people who need a bit of help rather than those who need a lot. Now they are fully up and running, they will need to work harder to reach people with multiple disadvantages and special needs," she said.

Paul Convery, director of the Unemployment Unit and a leading expert on employment programmes, said: "The scheme has not met ministers' highest expectations, but it is a lot better than anything which came before."