Alistair Darling on Wednesday unveiled the first mass job creation scheme since the 1980s in a “jobs budget” that set aside £3.1bn to shore up efforts to tackle unemployment.
The chancellor created a £1bn fund to provide training or work on community schemes for up to 250,000 jobseekers to ensure that a generation of young people were not “abandoned to a life on benefits”.
But some experts expressed doubts over the plan’s effectiveness, arguing the job creation schemes would offer short-term relief without increasing long-term employability. It was also unclear how the scheme would fit in with other programmes for the long-term unemployed.
The announcements came as Britain’s jobless total exceeded the level of the time Labour came to power in May 1997. Almost 40 per cent of the 2.1m unemployed were aged 24 or less, according to the official figures.
As a result of the grim jobs market, the Department for Work and Pensions emerged as Whitehall’s main winner from the Budget.
As well as the £1bn “jobs fund”, about £1.7bn will be split between JobCentre Plus, the frontline employment service, and Flexible New Deal, the flagship long-term unemployment scheme, which is still being tendered. Both services have been under severe pressure from the dramatic rise in jobless numbers.
Under the job creation scheme, councils and voluntary groups will be able to bid for £6,700 a head to employ young people in areas ranging from gardening and insulation to road maintenance and social care.
James Purnell, welfare secretary, wants to offer participants both low-skilled and “quality jobs” in creative industries, the environmental sector, sports and the arts. “These 250,000 jobs will be real opportunities, to give young people skills and the chance to experience the pride and purpose of work,” he said.
By January 2010, a guarantee will be in place offering all under-25s unemployed for more than a year either paid work or training. Some participation in programmes may be made compulsory.
Paul Raynes of the Local Government Association said the programme was a big step forward. “What we see in this announcement is the recognition that clunky national-level programmes don’t have the responsiveness and targeting of local action.”
The scheme is effectively
a revamped version of
Margaret Thatcher’s “Community Programme”, which employed about 230,000 at its peak in the mid-1980s.
“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,” said Ian Mulheirn, director of the Social Market Foundation. “Lagging lofts is great if you want a career in loft lagging but not much use for a future job in computers.”
Mr Mulheirn argues that funds for job creation should have been directed at the FND programme for the long-term unemployed, which he said remained “under-resourced”. Whitehall insiders argue that the Department of Work and Pensions now has sufficient money to fund the programme properly.
Welfare providers bidding for FND contracts expressed confusion over how their work would fit in with the new job creation programme. Some young people are likely to be diverted from the jobseeker programmes while they complete community work.