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National Audit Office report: The New Deal for Young People

The New Deal for Young People

"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."

"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."

Sir John Bourn

 

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.

 

Publication details:

ISBN: 0102914273 [Buy a hard copy of this report from TSO]

HC: 639 2001-2002

Published date: February 28, 2002