Four fixes for New Deal

The Conservative party has started to grumble about New Deal. According to Employment spokesman John Bercow MP, it has been a "colossal and expensive failure". This sort of absurdity is completely at odds with a consensus view that New Deal has been a highly effective programme. But the background of wild Tory criticism - and the knowledge that New Deal's pledge card commitment has holy writ status - also makes it hard to offer any measured critique.

But looking beyond the orthodoxy, some hard questions do need to be asked. We publish tables each month on our website that reveal how variable are the success rates across the country. Admittedly we use a definition of success that places New Deal in the most demanding light by showing what percentage of all entrants have entered known job destinations that are "sustained" (i.e. have lasted for more than 3 months).

So, on this measure, why is the job entry rate amongst young New Deal participants just 33%; why has only 1 Delivery Unit in the whole country managed to make it past a threshold of 50% sustained job entry; and why have the Delivery Units in Central London - in the jobs growth hotspot of Britain - managed to get barely a quarter of their participants back into lasting work?

We do not ask these questions just to be awkward. At the Unemployment Unit & Youthaid, we have been amongst the staunchest supporters of New Deal - and taken a bit of stick for it too. We said almost 3 years ago that New Deal represented the best chance in a generation to permanently rescue Britain from the debilitating effects of long term unemployment.

We still think that.

But the New Deal must be more than just a pledge card commitment. It has to be step-change improvement in the life chances for over half a million people.

So, the New Deal has to raise its game. The most effective changes must come from 4 directions:

What we are describing for the future are the models that have been spearheaded in Employment Zones, the 20 Action Team areas and with the "new intermediaries". The Government has set aside 40m for the Action Teams and just under 10m to encourage new types of intermediary organisations.

This is plainly a vision for the future and the Government should really get down to spending a bit of money to make sure it happens quickly. There is no shortage of "windfall" tax receipts. Significant underspends mean that the New Deal budget keeps on stretching. The unallocated budget has grown from a "reserve" of just 350 million in April 1998 to 570m last November and to over 1bn by March 2000.