Cambridge Policy Consultants' study of the Northern Ireland scheme shows that it failed in its central aim of helping the long-term unemployed find permanent work.
The ACE gave 10,000 adults employment and training between 1981 and 1995, when it was wound up. It was set up as a model scheme that was supposed to inform government policy for all of Britain during most of the Thatcher years.
The study, commissioned by the Training and Employment Agency (Tamp;EA) in Northern Ireland, found that only 42 per cent of 412 former ACE workers were employed at the time they were interviewed.
"In no case did ACE show a significant influence on the odds of being in employment at the survey date. The implication, therefore, is that taking part in ACE does not increase participants' chances of finding work."
The programme was not particularly worthwhile for women returners, for helping people find more secure or higher-paid jobs, or for reaching long-term unemployed people in no-earner households.
The consultants admit that the programme brings considerable benefits through tasks such as benefits advice, care of the elderly, childcare, environmental work, running thrift shops or women's groups and painting, decorating and gardening for the elderly and low paid.
"Were ACE to stop tomorrow, it would undoubtedly cause a lot of hardship amongst many communities." But this community benefit is not a primary objective of the programme, the report says.
It criticises the Tamp;EA when it says there has not been an explicit written rationale for ACE and that the agency has not made the securing of permanent work a condition of the programme.
"When projects apply for new posts, the criteria that they must fulfil in order to be eligible for approval by the Tamp;EA are primarily to do with community benefit and non-displacement of other employment, and do not include a requirement to explain how the activity will benefit the ACE worker," the report says.
Later it adds that the Tamp;EA or another body could play a more active role in managing the programme.
The study found that just under one-fifth of workers gained NVQ level 1 and only 10 per cent level 2. This is because the one-year work period is too short and the training budget of pound;160 per person too low. In some cases workers did training for childcare NVQ but no funding remained to pay for their assessment.
It recommends that, following introduction of New Deal, ACE should be scaled down and given a new image, title and rationale. It also needs greater resources to allow projects to pay higher wages, employ workers for longer hours and increase the amount of support and training.