The New Deal is driving training providers out of business, report Geraldine Abrahams and Neil Munro
LORD MACDONALD, the Scottish Office Industry Minister, is being asked to investigate the Government's flagship New Deal programme in Scotland.
The Pounds 300 million initiative is accused by the Scottish Training Foundation of seriously eroding other programmes such as Skillseekers, Modern Apprenticeships and Training for Work.
The reason, according to Alex Brown, the foundation's chief executive, is that the Employment Service, which is responsible for the New Deal throughout the UK, is hijacking the target group of unemployed 18 to 24-year-olds.
The New Deal, which is intended to lead to a job, full-time education or training, a voluntary sector place, or work with the environment task force, has now been extended to jobless over-25s and Mr Brown says this is also beginning to hit training providers.
He claims at least six have gone to the wall in the greater Glasgow area since the New Deal began in April, because they have lost business through a downturn in numbers enrolling in Training for Work, the adult programme.
Scottish Enterprise, the Government's central Scotland economic development and training arm, is also said to be worried because it is judged and funded on the throughput of trainees on the programmes it supports. The agency's budget for youth and adult training has already been cut from Pounds 161 million in 1996-97 to Pounds 150 million in 1997-98.
The foundation represents 100 members among private trainers, the local authorities, colleges and employers. Mr Brown acknowledged that Scottish Office figures released last week show that 3,500 of the 17,700 entrants to the programme had a job by the end of September but said this was not the full picture since a large number were also going through "a revolving door". "Training for Work is dying in many parts of the country," he warned.
The figures show that of the 3,500 who were placed on one of the four New Deal options, more went into full-time education and training than into subsidised employment - 1,500 against just over 1,000.
This is probably good news for the FE colleges and perhaps, eventually, for the private trainers. Mr Brown says his members are only now reporting an upturn in business, and many have been without any income for some months.
Sandra Duncan, who chairs the Glasgow Training, Employment and Education Forum, says groups like her own have had to take on many other aspects of development for unemployed people or go under. "Suddenly a whole group of young people is no longer eligible for mainstream training programmes," Ms Duncan said. "The 18 to 24-year-olds must be put forward for New Deal. They can no longer go into a training programme.
"They are trained through New Deal which is similar in concept to Training for Work in that it offers the equivalent one day a week towards the qualification, although on a six-month rather than a yearly basis unless it is full-time training.
"But the difficulty for private training companies wanting to be involved in New Deal is that they can only do so as employers or as training providers for employers. They cannot actually bring people on to a training programme. Only the voluntary sector or the environment task force can do that."
Frances McCarroll, a business development consultant, has seen a massive change in the five years she has been involved with the training business. "A lot of the big training companies did not see the change coming," she said.
"Those that depended heavily on Training for Work and New Deal have been affected but there are many other training providers who have done commercial work and they have downsized. Training providers are going to have to work with one another and form partnerships, and some of them will survive because of that.
"The colleges have the resources and are now marketing themselves differently. They see themselves as commercial organisations with commercial thinking. They have adopted an enterprise culture and will survive where a lot of the training providers will not."
Sandra Duncan also believes there is worrying evidence that many of the New Deal trainees are not "job ready" when they leave the gateway. "If they are fairly job ready, they can go on to an option or a job, but problems arise for the bulk of people, especially in Glasgow, Edinburgh and Dundee, who have core skill needs and require additional support," she said.
"They will go through 'interventions' during the gateway but the training providers who may want to offer their services cannot do so because, without knowing how many clients are going to come their way, they cannot afford to sit around for two or more months without trainees.
"At the end of the gateway period, many of the people are still not job ready. But they cannot do a training programme because they are on New Deal."
Alex Brown says that, since the New Deal is targeted on young people out of work for more than six months and adults who have been without jobs for more than two years, "the challenge is to make them employable and that is not always the case when they emerge from the gateway".
The New Deal may be the latest in job creation but not, it seems, for those providing the training.