Public-sector bodies get New Deal go-ahead

The Government this week amended its New Deal package for the young unemployed by allowing public sector organisations to become eligible for job subsidies.

The decision to extend the scheme to pay employers Pounds 60 a week for up to six months for taking on people aged 18-24 is in response to fears that the Government would not be able to deliver its promise to provide a range of options for those on benefit.

Employment minister Andrew Smith said the changes will allow local authorities, health trusts, the Post Office and the BBC to offer work placements. The organisers of 12 pilot schemes that were due to start in January have been told to amend their plans.

According to the Employment Policy Institute, inclusion of the public sector will alleviate the difficulties of providing work placements in areas which no longer have an industrial base.

However, the institute is also concerned that the Pounds 3.5 billion to be spent over four years on the programme may not provide the resources necessary to deal with the concentrations of unemployment in areas such as Tyne and Wear, Merseyside, Strathclyde and parts of London.

Other critics suggest the Government has failed to take account of the fact that around a quarter of the young jobless are unlikely to take up any of the four options of work placement, voluntary sector work or full-time education or training.

The employment sub-commitee of the Education and Employment Select Committee was due yesterday to hear evidence from the minister; agencies and academics on the New Deal.

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