Business blasts Labour over New Deal fiasco

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BUSINESSMEN have slammed the Government's flagship New Deal work programme, accusing the Employment Service of failing to send young people for jobs.

The British Chambers of Commerce, which represents thousands of companies, has written to the Government expressing "strong concerns" about the way in which the multi-million pound scheme is run and warning that in some areas no young people at all are being passed to businesses. They say the system is creating "significant disillusionment" among participating firms.

The letter, which has been leaked to The Independent on Sunday, complains that many of those who signed up to the New Deal, aimed at getting 250,000 young people from welfare into work, have still not had a young person referred to them.

The business protest follows growing concern about the implementation of the New Deal for other sections of the community. The Tories claimed that the New Deal for Lone Parents - which was rolled out nationally last week - has failed to find jobs for nine out of 10 applicants.

Chris Humphries, director general of the British Chambers of Commerce, wrote to Sir Peter Davis, Chairman of the Government's New Deal Task Force, on 14 October demanding a meeting to let businesses express their anxieties.

In his letter, he told Sir Peter that the directors had "raised strong concerns about the progress of the New Deal" at the last meeting of the British Chambers of Commerce.

"Chambers and their business members have been strongly supportive of the New Deal, and many of our members have 'signed up', offering placements, subsidised travel through their transport companies and a variety of other contributions," he wrote.

"Their concerns now arise because very few or, in some cases, no young people have been referred to them. Many companies report that they have also had little or no contact from the Employment Service and so a severe lack of information is magnifying their confusion and leading to significant disillusionment."

He said that Chambers of Commerce were unable to resolve the situation because they too had a "marked lack of objective information from the Employment Service, reducing their capacity to help".

Gordon Brown, the Chancellor, and David Blunkett, the Secretary of State for Education and Employment, are aware of the business community's concerns and have asked the Task Force to draw up plans for calming small companies.

A source at the Department for Education and Employment said many young people were still taking the "Gateway" training given to all participants at the start of the scheme. "Around 50,000 young people have already benefited from the New Deal - 30,000 in work and 20,000 in other options," he said. "Over the next few months more will move off the Gateway and link up with employers."

However, a Conservative spokesman said the New Deal had now been revealed as a "fiasco". "These companies wanted to get involved and they have been unable to because of the incompetence of the scheme," he said.