Young people taking part in the Government’s preparation-for-work scheme will be put off if more elements become compulsory, the education select committee heard this week.

MPs listened to evidence from Jane Millar, of Bath University, who has carried out research into the effectiveness of the New Deal on behalf of the Joseph Rowntree Foundation.

She said forcing people to follow the direction they are advised to take within New Deal-type programmes is not a popular idea among the unemployed or those responsible for running them.

“I think the evidence from the United States is that heavy compulsion does not produce better outcomes,” she said. “In the Netherlands, also, there was not too much support for compulsion. In this country there is not much support for compulsion from people across the board.”

Asked how to boost take-up of the environmental and voluntee option of the New Deal programme, she said: “You could pay them more. If you are on an environmental task force, you could have the feeling that you are being exploited. If they feel they are providing cheap labour they are not so keen, which is not surprising.”

The Government needs to devise better ways of assessing and evaluating whether the New Deal has succeeded in improving people’s employability, she said, warning that simple statistics about the number who find work can be misleading.

The committee also heard from Ruth Silver, principal of Lewisham College, south London, where 40 per cent of her New Deal students end up in a job.

The college has a policy of integrating them with the main student body to increase their self-esteem and it acts as an employment agency, paying their wages in the workplace for a fee which is charged to their employers. She said similar schemes need to be repeated around the country, telling the committee: “You need to do more with New Deal.”