Youth unemployment: The real deal?

The New Deal for Young People elicited much of the infectious optimism that accompanied New Labour's rise to power in the summer of 1997. And for good reason. Aimed at 18- to 24-year-olds claiming jobseeker's allowance for six months or longer (or less, in certain cases), it promised training, subsidised employment and voluntary work when the scheme was formally devised in July 1997.

The winning idea was that young people would gain not just a job, but long-term employability. Raising hopes further was a stupendous budget of £3 billion-plus over four years (courtesy of the windfall tax on utilities), with unmatched political prominence and a tide of goodwill accompanying the new government. Surely it could not fail.

Support to work

The New Deal's architecture was devised by London School of Economics Professor Richard Layard and was based largely on studies of Sweden's labour market. It intended to give long-term unemployed people access to a package of support to help them get back into work. The flagship young people strand of the programme was the first to get under way in April 1998 and was followed by New Deal 25 Plus that summer. A raft of New Deals for other groups, including musicians and lone parents, have since been added.

Little has changed in the structure of New Deal for Young People in the past nine years. Under the scheme, a young person enters a 'gateway' period of up to four months, receiving one-to-one advice about job search and interview skills. Then, if he or she still cannot find a job, one of four options must be chosen. The young person must take a low-paid six-month job placement, go into full-time education and training for up to 12 months, work in the voluntary sector, or accept a placement with the Environmental Task Force. Failure to comply results in the removal of benefits.

Steve Hillman, learning services manager at homelessness charity Foyer, insists there was just cause for the optimism when the scheme launched. "The New Deal recognised young people's particular needs, and for the first time, gave them a chance to fulfil their potential," he says.

Fast-forward almost a decade and more than 1.15 million 18- to 24-year-olds have been through the New Deal. During that time, the Government claims it has been an unprecedented success. Jim Murphy, minister for work and pensions, argues the programme has brought "a virtual eradication of long-term unemployment among young people, from about 85,000 in May 1997 to just over 10,000 in January 2007".

Impressive stuff. But further scrutiny shows that 38 per cent of those 1.15m participants failed to find a job, and this during Britain's longest-ever economic boom. Perhaps even more concerning is that four out of nine places on the New Deal for Young People are taken by those who have been on the programme before, according to centre right think-tank Reform.

Part of the problem, says Howard Williamson, Young People Now columnist and a member of the original New Deal Task Force in 1997, stems from two fundamental difficulties with the programme when it was originally rolled out. First, planning assumptions were interpreted as specific delivery targets by local authorities. Second, civil servants naively believed that the New Deal would be welcomed with open arms.

Yet what disappoints Williamson most is those people the New Deal has sidelined during the past nine years. "With so much at stake, the Government went for the easy wins," he says. "Lack of political courage means that a 22-year-old from the Borderlands, who has a drug habit instead of a job, who cannot read or write and who needs to be fast-tracked from his hostel to the Jobcentre, has never been properly targeted."

Joined-up thinking

It is a point that Murphy disputes: "Each young person is allocated a Jobcentre Plus personal adviser to help sort out issues that get in the way of getting a job. And the advisers work closely with other agencies on a range of issues such as homelessness, drug or alcohol problems, criminal records or debt."

Murphy also cites support programmes such as Progress2Work, which help people recovering from illegal drug misuse into work.

Andrew Selous, shadow minister for work and pensions, believes that such initiatives are a step in the right direction, yet they still miss the key reason why nearly half of young people end up back on benefits within a year of leaving the New Deal programme. And that is their lack of basic core skills: "We should move the basic skills assessment forward to the first day instead of after six months. That way, we'll know what issues need tackling."

Professor Dan Finn, an expert on welfare-to-work strategies and who was also part of the New Deal Task Force in 1997, agrees such shortcomings need addressing. He also believes that the scheme fails to help some of the most vulnerable in society, such as those on drugs or the mentally ill. Many of these groups fail to sign on and therefore slip under the radar. "These individuals are not reflected in the main unemployment figures used by the Government," he says, "nor, for that matter, is the young mother who might consider a job in three weeks' time, but not immediately. These are who we should really be reaching out to help."

As the learning services manager at Foyer, Hillman encounters young people with complex needs. And while he cautions against writing off the New Deal as an outright failure - "the numbers of young unemployed are also due to changes in the labour market over the past 10 years, plus employers' changing skills requirements" - he says the programme often makes little sense to his charges. "A lot of short-term work leaves them little better off than when on benefits," he says.

Off track

There is no doubt the New Deal for Young People has lost its initial sheen, and that some fundamental problems persist. As Finn puts it: "At its outset, the New Deal heralded the way: it was cutting-edge, sexy even. But it's lost out to the health service, and funding has been pegged back pending a radical overhaul of the welfare state."

Even Murphy admits a new approach might be needed. "It's time for us to consider how to help even more people move into work - not just those claiming jobseeker's allowance but also those claiming other benefits or with children living in poverty," he says.

For Williamson, though, time is up. "I'd kill the New Deal now," he says. "Or at least have a root and branch review. It was never meant to be an embedded programme, yet it has drifted on and its role has become blurred. The vast majority of young people have conventional aspirations: decent job, healthy family, a safe life. But that 2.5 per cent of the population untouched by Blairite policies remains, bedevilled by mental health problems, drugs and all the rest ... the next New Deal should help them."

NEW DEAL HELPS LEE FIND WORK

Lee Amos, from Torry in Aberdeen, has wanted to be a mechanical engineer ever since he got into motorbikes as a youngster. Today, aged 20, he is much nearer that goal. Lee had been signing on for six months when, last October, he was referred for an interview in his local Jobcentre in Torry through the New Deal for Young People.

"The woman there asked what I wanted to do, and I said I wanted to learn an Apprenticeship, preferably in mechanical engineering," he says. "When she warned me this might be difficult, I said the most important thing was to find a trade for the long term. Then, just half an hour later, she rang me. By pure coincidence, a company had rung asking if any apprentices were available. The company was called HP Pneumatics, based in Portlethen."

Now well on his way to being a pneumatics engineer, Lee is looking forward to starting college in August. "I'll be training one day a week over two years to get a Higher National Certificate in engineering," he says. "The company is investing in me by releasing me for one day every week so I can become more qualified."

KATE LEFT FRUSTRATED BY NEW DEAL FOR YOUNG PEOPLE

As someone who has spent seven years of her life in and out of hostels and emergency accommodation, 23-year-old Kate Wilson desperately wants to get on in her life.

Her eagerness explains why she moved from Bedford to Torbay in Devon to work as a sports activity leader for English language schools, and why she was clamouring to get onto the New Deal for Young People when this work proved too temporary. So she was frustrated when her requests were initially refused.

"Twice they knocked me back," says Kate, who currently volunteers at Foyer in Torbay. "The Jobcentre said because I'd not been signing on for six months, I'd have to wait - that is, unless I had a criminal record or couldn't speak English. Only when six months were up in November was I allowed to join."

Kate also wanted to do an access course at South Devon College, but couldn't afford to because if she had studied over 15 hours a week she would have lost her benefits. "Yet now that I'm on the New Deal, I spend 15 hours a week at college anyway, plus at least 10 more on assignments at home, and still get my benefits," she says, perplexed. "I wasted months to get on the programme, and they wasted money paying me until I got onto it."