An extra £1.3bn ($1.97bn) has been earmarked to help find work for the growing band of unemployed, whose number is expected to soar from 1.82m – already the highest total since Labour came to power in 1997 – to well over 2.5m by the end of next year.

The number of staff at Jobcentres, which has been cut by more than 16,000 to 68,000 since 2004 as part of a government-wide cost-saving drive, could even start to rise again in the short term.

Plans to axe a further 3,000 staff have already been shelved as Jobcentres prepare to cope with a surge in the number of people likely to be looking for work.

Some 2,000 temporary staff brought in over the summer by the Department for Work and Pensions to cope with the government’s welfare-to-work changes are also being kept on to help with the rising workload.

Much of the extra cash, which represents a rise of more than 15 per cent on Jobcentres’ annual budget of £3.05bn, will be spent on extending local employment partnerships. Under these schemes employers, such as Tesco, Travelodge and B&Q, work closely with local Jobcentres to provide employment for hard-to-place groups such as the sick, disabled, lone parents and long-term unemployed.

According to the Treasury, more than 70,000 jobs have been found by 10,000 business members of local employment partnerships. Under the new spending plans these schemes will now be widened to include all unemployed people.

A new National Employment Partnership, to be chaired by the prime minister, will also be established to help local schemes focus on the best ways of getting people back to work.

Rapid response units that go into workplaces to offer employment advice and provide training as soon as redundancies are announced will also be extended to include all sizes of company. The service will “now be available to small as well as large-scale redundancies”, the Treasury said. It would help workers with writing CVs and interview skills.

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