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40% of New Deal job entrants go into un-sustained employment

by Paul Convery

Working Brief 107, August/September 1999

Data released on July 29th shows that - by the end of May - almost 300,000 young people have now entered the New Deal. Of these, almost 160,000 have completed their spell on the New Deal with 69,000 of leavers (43%) having found sustained employment. The New Deal for people aged 25+ has had 140,000 entrants of whom 60,000 have finished the programme with 10,000 (17%) having secured a job.

The concept of sustained employment is important for New Deal's success. The New Deal design emphasised the neeed to avoid the programme acquiring any reputation for "churning" unemployed young people between short term jobs and further spells of unemployment. Because the Government does not want to count entry into short term jobs as a success, the number of these job entrants has been removed from the headline New Deal monitoring data. However, although this data is available, few commentators have analysed the information which shows that 4 out of 10 placings have not lasted.

In the 14 months since the programme's national launch, 118,000 unsubsidised jobs have been gained by New Deal participants. However, 49,000 of these have not lasted for more than 13 weeks (the current definition of sustainability) which is 42% of all unsubsidised job placings (44% for men and 34% for women). Amongst people from ethnic minority groups, the rate of un-sustained employment is a little lower - with 37% of job entrants not lasting more than 13 weeks.

Even amongst subsidised jobs, where 21,000 young people have been placed, 19% of jobs did not last more than 13 weeks.

This worryingly high level of precarious employment peaked at the end of 1998. In both November and December 1998, the number of un-sustained jobs actually outnumbered those which were more lasting. This undoubtedly reflected the intake of seasonal workers and the trend has declined since. The most recent months for which data is available show the proportion dropping to 33% and 21% although these obviously reflect the fact that the 13 week duration had not fully elapsed at the time of data collection.