New Deal 'costs £11,000 per job created'

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The Government will come under fresh attack over the cost of its high-profile New Deal programme today with an independent report showing it costs as much as £11,000 a job.

The Government will come under fresh attack over the cost of its high-profile New Deal programme today with an independent report showing it costs as much as £11,000 a job.

MPs will say an original estimate of £4,000 per job, given by ministers, was too low because it also included jobs that lasted for fewer than 13 weeks, and subsidised jobs.

The Tories will exploit the findings of the Education and Employment Select Committee. John Bercow, the Tory employment spokesman, said the figures were a "ghastly embarrassment" for the Government. "The report demolishes claims that the New Deal is value for money," he said. "It is an expensive flop which is failing hundreds of thousands of people and is picking the taxpayers' pockets at the same time."

Graham Brady, a committee member and Conservative MP for Altrincham and Sale West, said unemployment had been falling faster before the scheme was launched.

But Tessa Jowell, the Employment minister, accused the Tories of using "wild" figures to attack the initiative. She said each New Deal job was costing just under £4,000, based on the £650m already spent on the scheme, helping more than 200,000 young people find work.

The Government would build on the success of the New Deal and help people "forgotten" by the previous administration, she added. The scheme had contributed to falling unemployment and was virtually self-financing.

Derek Foster, the chairman of the committee, said: "The New Deal has had a positive impact on the lives of many young people. The New Deal must now be strengthened so that the most disadvantaged participants from non-white ethnic minority groups are properly supported in their efforts to obtain sustained jobs."

The report, which assessed the New Deal over the past two year, also expressed concern over the "relatively high level of those who moved into unsustained jobs".

It also revealed that more than 215,000 young New Deal participants have found work, and 162,000 young people obtained jobs for more than 13 weeks. Of these, 139,000 were sustained, unsubsidied jobs.

"We welcome the Government's commitment to achieving value for money in the New Deal programme," the report concluded. "This is a complex area and one in which independent analysis is essential."

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