THE New Deal for young people is celebrating its second birthday. Big corporate backers and impressive statistics are being held up by ministers as proof that the big idea to tackle youth unemployment is working.

But there is mounting evidence that the New Deal is letting down the few in most need of its help.The flagship programme for tackling unemployment was designed with education and training at its core. Labour promised it would be a cut above the make-work schemes of the past and that it would give young people (and in its alternative forms, the long-term unemployed, lone parents and the disabled) real opportunities and new skills.

New Deal participants, for whom the employment service cannot find jobs, are given the choice of education, subsidised employment, self-employment, voluntary-sector work or the environmental task force. All five options include training.

One of Tony Blair’s key 1997 election pledges was to “get 250,000 young, unemployed people off benefit and into work”. Two years on, how is it doing?

According to ministers, the Government is almost three-quarters of the way towards meeting its manifesto pledge. They point to official figures which show that, out of 400,000 young people who have joined the New Deal, 185,000 have moved into unsubsidised employment. Around 125,000 are still participating.

This success rate explains why little has been heard of the New Deal recently. The Tories, who attacked the scheme vigorously before the last election, have fallen quiet, as ministers have produced reams of statistics showing that it - and its clients - are working.

However, as so often before, ministers’ pronouncements do not tell the whole story. An analysis by the Unemployment Unit amp; Youthaid, an independent research organisation which specialises in welfare-to-work issues, has found that almost 50,000 of the young people who have left the New Deal to take up work were claiming benefit again within 13 weeks.

Also, many of those helped into jobs by the New Deal may have found work anyway, thanks to Britain’s still booming economy. Total unemployment has fallen by 6.3 per cent since the New Deal started to just over 1.7 million at the start of this year. During the same period unemployment among 18 to 24-year-olds has fallen by only slightly more 6.5 per cent.

Despite this, Paul Bivand of the Unemployment Unit, believes that the initiative has been an improvement on previous government schemes. “The New Deal for 18 to 24-year-olds has had a broadly positive effect. It’s gone rather better than we expected,” he said.

The real question, though, is whether it is living up to its own advance publicity. Is it giving young people the skills they need to move up the career ladder? Here the evidence is more mixed.

Most of hose finding jobs through the New Deal never take part in any of the five options. In some areas, up to 85 per cent of those getting jobs move straight from the “gateway” - where clients’ needs are assessed, job search advice is given, and they are matched to vacancies - into employment.

The gateway was not part of Labour’s original plans. It was invented by the civil service as a way of assessing young people. Arguably, it is turning out to be the most successful part of the New Deal.

The fact that it is proving easier than expected to find jobs for young, unemployed people is a good thing - implying that a larger number of these people are more employable than originally thought. But it does mean that they are not getting the education and training the New Deal was designed to provide.

It also means that the third of young participants, who are placed on an option, tend to be the more challenging cases. And the first round of inspection reports on the local delivery of the options, published this month, suggest that these cases are proving difficult to crack.

Dave Sherlock, chief executive of the Training Standards Council, the body responsible for inspections, said: “The New Deal concept is right, all the options are working somewhere but unfortunately not all the options are working in any one place. The results which are being achieved are disappointing. In many areas, the employment and qualification outcomes are very poor.”

He said that the subsidised employment option is generally good, but the education option - chosen by four in 10 - is causing particular concern. “The biggest option by far is full-time education. Unfortunately that is the one with the most disappointing results,” said Mr Sherlock. “It is not unusual for under 10 per cent of people to come out with qualifications.”

Courses on offer under the New Deal typically lead to foundation or national vocational qualification level 2, although more advanced courses are available where they would enhance job prospects. Basic skills courses are favourites for those who have left school without qualifications. Vocational courses such as construction, hairdressing and information technology are also popular.

Only one of the 11 New Deal areas so far inspected received a good grade for their education option and four were judged to be unsatisfactory. Typical criticisms include poor attendance, insufficient workplace experience and clients being put on inappropriate programmes.

“Too many colleges are not fulfilling the requirement for a 30-hour week and many are shoe-horning people into existing programmes,” said Mr Sherlock.

When you remember that education and training were the impetus for the New Deal concept this failure becomes all the more surprising. Unless it is tackled, the New Deal will continue to help young people into jobs but will fail to help many of the most socially excluded.