New Deal wobbles

A few fingers have been placed on the pulse of New Deal as statistics for the programme's first 6 months' of performance nationwide were released in late November. And these show some startling features.

Firstly, the wide variation in performance across the country. The Unemployment Unit & Youthaid's has exclusively published the first 'league table' - for all 142 Units of Delivery - which blows away some preconceptions. This shows that some of the worst unemployment hotspots in the country have achieved job entry rates that outstrip the more economically buoyant areas. Recession hit areas like Sefton and Durham, for example, have beaten every single part of London. Meanwhile most of the private sector-led areas have turned in rather poor performances and languish near the bottom of each regional table.

Secondly, the sheer scale of New Deal is striking - 170,000 young people across the UK having entered the Gateway since January in Pathfinder areas and since April elsewhere. Forty thousand have already left the programme. The majority of these have moved into regular employment or other types of non-New Deal education and training. About 10% have ended up moving onto other benefits. And, although a quarter of leavers are still classed as "destination unknown" most will have gone into jobs.

This phenomena of the "disappeared" has excited media attention and rightly so. But it should not be exaggerated either. Every month, large numbers of people leaver the register without bothering to tell the Employment Service about it. And because the last Government was not too bothered about where claimant count leavers went to, the ES systems are still not routinely identifying where almost a third of JSA sign-offs go to - even if the National Insurance system picks them up as having started a job.

So, after accounting for leavers 130,000 are still on New Deal.

But over three quarters of these are still on the Gateway. This is underlined by the fact that almost a third of April joiners are still there six months after starting New Deal. Slow progress through the Gateway has several causes: ES staff underestimated how job un-ready a sizeable part of the New Deal population is; so they are trying hard not to place their clients into jobs or other New Deal options which might be unsuitable; some of those stuck on Gateway are re-joiners who have tried an option or an unsubsidised job which didn't work out; lastly, the ES are just taking too long with clients - instead of an intensive spell of assessment, tasters and guidance, many young people are effectively on a regime of weekly or fortnightly meetings with their New Deal Personal Advisors.

This was identified in a key recommendation from the New Deal Task Force report on meeting the needs of the most disadvantaged. It argued that participants need "a sense of momentum and early success" and this requires enriching the Gateway with more option tasters, intensive activity and other services. The Gateway experience has to be significantly different to claimants' experience of run of the mill fortnightly signing-on reviews.

This is all causing some worry to Ministers. And so are the rumblings from employers. The 33,000 firms who are lined-up to provide almost 50,000 jobs now want to know what's happened to the eager applicants they were promised would start to flow through by mid Summer. Some also say their recruits lack the level of preparedness they had expected

Privately they say that New Deal is in danger of becoming supply-led not demand-led - the ES should not be monopolistically handling most of the placement liaison with employers and it should be engaging with employers at all stages including the Gateway. Firms find some local delivery arrangements burdensome and believe the ES Districts can be too introspective. Larger firms are pleased with their handling by the ES's Sheffield based Large Organisation Unit, but are frustrated by bottlenecks locally.

The last serious glitch has been caused by the colleges contracted to deliver the Full time Education and Training option (FTET). September saw a dramatic leap in the numbers joining FTET. Why? Because college terms started. Despite promises that colleges could deliver roll-on roll-off courses regardless of the traditional academic year, the opposite has happened. Partly this is determined by some examining bodies keeping to a traditional year schedule. But it raises an alarming prospect that, once the academic year has started, these institutions will effectively have closed their doors to new recruits until next September. If so, an urgent review of more flexible FTET capacity may be required. As over half the cohort is qualified below NVQ2, demand for FTET will not fade away.

Never afraid of jumping on a bandwagon, CPS, the Tory think tank cranked up the Opposition's - thus far - incoherent attacks on New Deal by publishing claims that New Deal costs 11,333 per successful job entrant. Jobs Minister Andrew Smith says it's closer to 2,400. The author, Tory MP Damien Green, makes a fatal error by comparing like with unlike - taking the global half-year budget for New Deal and then dividing it only by subsidised jobs achieved so far. In doing so, Green has delivered a hostage to fortune. As the months go by, on his methodology, the per capita cost of New Deal successes will come tumbling down.

But this has touched a raw nerve with the Government. Ever mindful of the accusation of being spendthrifts, Ministers also know that New Deal is encountering glitches. But it is not hitting any fundamental problems. As the last Government found, too many minor defects in a programme eventually add-up. The trick is to adjust these problems before they turn into something serious.

In the face of emerging anxieties - from people who are fully committed to making New Deal a success - the Government is rightly prepared to make some necessary adjustments. But Ministers are unlikely to significantly redesign New Deal. Nor should they. At its core, New Deal is all about jobs. Real jobs. With real employers paying real wages. Any slippage into "make-work" would be a disaster.