‘Woeful’ New Deal criticised

A former minister for welfare reform has criticised one of Gordon Brown’s flagship policies on unemployment.

Frank Field MP argues the New Deal for young people is “woeful” and has failed to reverse unemployment since its launch in 1998.

Published by the think tank Reform Welfare Isn’t Working: The New Deal for Young People claims that despite £3.5 billion funding, more young people are out of work or education than in 1998.

Despite the New Deal initiative, which has been heavily championed by the chancellor, Mr Field found youth unemployment has risen 18,000 since 1997.

The number of young people not in employment or education is up 131,000 since 1997, resulting in a 283,000 increase over the past decade in the number of economically inactive young people.

Mr Field argues control of the New Deal should be devolved to local benefit officers. Limits for receiving benefits should also be considered to prevent repeat claimants.

The former Blair minister said: “The change in leadership gives a unique opportunity for the government to renew in the most serious way its strategy for the rest of the parliament.

“A 27 per cent line of support amongst voters makes this task urgent. The six reviews of welfare reform are about contributing to that most serious review.”

The Liberal Democrats supported calls for a review, describing the New Deal as “outdated and inflexible”.

Work and pensions spokesman David Laws argued the New Deal was failing to put the needs of unemployed young people first.

“Employment support shouldn’t be seen as a bolt-on to unemployment benefit, but should be at the heart of trying to get people into suitable and sustainable employment,” Mr Laws argued.

He added: “The figures don’t lie: with over half a million young people unemployed and 2.5 million still on incapacity benefit, the government’s employment strategy is clearly failing.”

The Department of Work and Pensions defended the scheme and claimed the New Deal has been a success.

It has helped 700,000 18 to 24-year-olds into work, a spokesperson claimed, and the number of young people on unemployment benefits has fallen by 100,000 since 1997.

“However as John Hutton has made clear we recognise the need to refresh the New Deal so it continues to deliver jobs and opportunities to those hardest to help,” a spokesperson added.

Nevertheless the Conservatives joined the argued and claimed the chancellor’s statement that long-term youth unemployment had been “virtually extinguished” was a complete sham.

Shadow work and pensions secretary Philip Hammond warned the New Deal had become a “revolving door” for many young people, with few job seekers staying off welfare.