Press Release - The New Deal for Young People
28 February 2002
The New Deal for Young People achieved its target of placing
250,000 young people into work in September 2000, and by October
2001 had helped 339,000 into jobs. It has had a positive effect on
levels of youth employment and on the economy more broadly,
although, as with other labour market programmes, many of these
young people would have found work anyway, without the help of the
programme, according to a National Audit Office report published
today.
In his report to Parliament today, NAO head Sir John Bourn noted
the steps that the Employment Service is taking to ensure that the
New Deal for Young People continues to have such beneficial
effects. He said that for these to be sustained the programme needs
to adapt to changes in the economy, which might result in there
being fewer unfilled vacancies. It also has to cope with a smaller
client group of unemployed young people, a larger proportion of
whom may face severe or multiple barriers to employment. These
barriers may include lack of basic literacy and numeracy skills,
homelessness, criminal records and drug or alcohol dependency.
By the end of October 2001, some 339,000 New Deal participants
had experienced at least one spell in employment. These include
about 244,000 who had left the programme for sustained (lasting
more than three months) unsubsidised jobs. While the destinations
of 30 per cent of leavers were unknown, external research
commissioned by the Employment Service suggested that 56 per cent
of these had left the programme for jobs. As at October 2001,
33,000 participants who had left the programme for work
subsequently returned to a spell of unemployment lasting six
months.
The Employment Service has not been able to monitor
systematically the nature and quality of jobs achieved by New Deal
for Young People participants, their progress made once in
employment or increase in their employability. However, there was
evidence that the long-term employability of programme participants
had improved.
According to estimates, in its first two years (to March 2000)
the programme reduced levels of youth unemployment by between
25,000 and 45,000 and increased youth employment by between 8,000
and 20,000. It also had the indirect effect of increasing
employment in groups other than 18 to 24 year olds by 10,000.
The average annual cost per additional person of any age in
employment lay within the range £5,000 to £8,000, but the changes
in employment levels as a result of the programme had increased
national income by more than £200 million a year.
The report notes the proposals for further improvements in the
design of the programme set out in the Government’s Green Paper
"Towards full employment in a modern society" (March 2001), which
are being implemented by the Department and the Employment Service.
Some of these proposals overlap with the report’s key
recommendations. The report’s recommendations include:
- targets should be set for all the programme’s objectives (such
as improving long-term employability), overall cost effectiveness
should be monitored and additional performance measures should be
designed to assess the value added by the programme;
- the Employment Service should continue to expand the role of
subsidised employment through more effective liaison with
employers, greater employer involvement in local programme delivery
and further incentives to encourage employer involvement;
- the continuing cost effectiveness of the programme’s work
experience options other than subsidised employment should be
assessed; and
- more targeted forms of help might be appropriate for
participants who have been through the programme previously or who
face particularly severe barriers to employment.
Sir John Bourn said today:
"The New Deal for Young People has been successful in
placing 339,000 unemployed young people into jobs, and the
programme has also had a beneficial effect on the
economy.
"The programme must continue to evolve to meet the needs
of the increasing proportion of clients with severe or multiple
barriers to employment and the changing economic climate. It is
therefore vital that the Department for Work and Pensions and
Jobcentre Plus continue to monitor and evaluate the programme’s
effectiveness. In particular, they must evaluate the changes
introduced to the programme to ensure that it continues to help
these vulnerable young people and provide good value for taxpayers’
money."
Notes for Editors
- The New Deal for Young People is the Government’s flagship
welfare-to-work programme. Introduced nationwide in Britain in
April 1998, this mandatory programme aims to help long-term
unemployed young people aged 18 to 24 to move away from dependency
on unemployment and social security benefits and into worthwhile
employment. By the end of October 2001, more than 700,000 young
people had participated in the programme, which is currently
delivered by the Employment Service, an Executive Agency of the
Department for Work and Pensions. From April 2002, Jobcentre Plus
will deliver the programme.
- Press notices and reports are available from the date of
publication on the NAO website at http://www.nao.org.uk/ Hard copies can
be obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office employing some 750 staff. He and
the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 21/01
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