The Social Market Foundation (SMF) responded to the Budget announcement, that councils will be funded to run job creation schemes, by saying their analysis of similar programmes in the past, and in other countries, suggests that local authority-led job creation schemes do not maintain jobseekers’ skills nor improve their employment chances later on.
The Government’s focus on how to avoid the consequences of long-term unemployment is welcome and spending is on the scale required. But SMF believes that the Government should instead use the £1.2bn it has earmarked for local authority job creation schemes to bolster its Flexible New Deal programme. Doing so can ensure that subsidised work experience places are appropriate to local employers’ future needs and tailored to individuals’ past experience.
New funding for the Flexible New Deal is welcome but £600m this year and £1.1bn next is too little. SMF analysis suggests that the scheme needs at least £1.4bn per year extra in both 2010 and 2011 just to maintain the level of spending per jobseeker. To deliver effective job-creation schemes, more money will be necessary.
The £1.2bn job creation money should be directed to the FND and the scheme’s incentives should be redesigned to keep jobseekers engaged. Without these changes, the consequences for the long-term unemployed could be dire.
Commenting, Ian Mulheirn, SMF Director, said:
“A successful employment scheme equips people to get a job when the economy picks up but the history of such council run schemes is that they don’t achieve this. Lagging lofts is great if you want a career in loft lagging but not much use for a future job in computers.”
“Instead the Government should use the Flexible New Deal for the long-term unemployed to make sure that employment schemes ultimately lead to real jobs once the green shoots appear.”
“However, while the Flexible New Deal approach is right, it is under-resourced and the current design of the scheme is not geared to fighting the recession. Significant changes to the scheme are needed.”
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For further information or comment contact Ian Mulheirn on 020 7227 4402.
Notes for editors: To read the full analysis click here. The analysis comprises: the SMF’s forecast of unemployment and long-term unemployment to 2012; a review of the effectiveness of past recession unemployment schemes; and policy recommendations for how the Government should act to change the Flexible New Deal.
In June, the SMF will be launching a report on the future of welfare to work policy, taking forward the work in its report last September, The Flexible New Deal: Making it Work