Dead Men Left

Thursday, April 07, 2005

The New Deal: an expensive farce

Gordon Brown is busy doing his social-democratic bit, talking up a "New Deal for jobs and skills":

The Chancellor said it was "ludicrous" for the Conservatives to claim the New Deal was not working when there was the lowest unemployment in 30 years with half the claimant count of 1997.

But the Conservatives said the New Deal was a revolving door back into welfare, claiming that less than one in five people in the programme were staying off benefits for more than a year.

The Tories have plenty of experience with unemployment and setting up shoddy training schemes, and they're right about the New Deal. The government has made some extraordinary claims for the existing New Deal, the most prominent being that

More than 375,000 long-term unemployed 18-24 year olds have found jobs through NDYP [New Deal for Young People]...

Which is sort of true, but doesn't exclude all those people who would have found jobs without the New Deal. A thorough study of the NDYP by a group of researchers from the IFS, "The Impact of the New Deal for Young People on the Labour Market: a four-year assessment" (in Wadsworth et al., eds., The Labour Market Under New Labour), finds that only 17,000 genuine new jobs had been filled by the scheme. With youth unemployment rates falling since 1994, the overwhelming majority of the 375,000 participants in the scheme would have found work anyway.

The Department for Work and Pensions’ most recent study of the programme, covering 2003, suggests that only a third of those now entering the New Deal find work afterwards. Over 40,000 18-24 year olds have now been through the entire New Deal scheme three or more times in just four years, strongly suggesting that the work found is insecure and inadequately paid. The National Audit Office also found the New Deal to be of limited value in a highly critical report.

So let Red Brown have his "socialist" moment. After eight years of little more than particularly energetic thumb-twiddling, the paltry achievements of New Labour's social programme are having to bear an enormous weight.