The increase in unemployment will mean an additional £1 billion will be needed in 2009 to keep the New Deal on track, says the Centre for Economic & Social Inclusion (Inclusion) in an article today [i]. Without this cash unemployed people will be losing out on the support they need.
Inclusion is saying that more funds will be needed to support the growing numbers on Jobseekers Allowance and those on other benefits. To maintain present levels of support to new and existing claimants Jobcentre Plus will need more staff and resources, but for those that do not get a job straightaway the New Deal will have to be expanded.
The New Deal is due to be reformed [ii] next year with new larger providers beginning to take over from October 2009 to run the ‘Flexible New Deal’. The timing could mean less provision in 2009 rather than more, because of the handover from old to new contractors. This important reform will be under threat if DWP does not signal soon that more funds will be available.
Dave Simmonds, Chief Executive of Inclusion said: “The New Deal has been this government’s flagship, but it is in danger of disappointing thousands of unemployed people next year because of a lack of funds and changes to how it is delivered.
Government needs to take two key actions. First, more will have to be spent on each person and planned reductions should be reversed. Second, plans to introduce the Flexible New Deal in 2009 should be speeded up with an emergency package to maintain provision.”
Damon Gibbons, Head of Policy at Inclusion added: “Local Authorities and local partnerships also have a critical role in the coming period. Government will need to help them gear up for the coming challenges to local economies, both to bring new jobs to their areas and to provide the extra support workless people will need”.
Fran Parry, Chair of the Employment Related Services Association said “ERSA cannot see how the levels of intervention now required can be met without DWP re-calculating Welfare to Work budgets upwards. Whilst a ‘rapid response’ approach is required for the newly unemployed to get them re-skilled and back into work as quickly as possible it is absolutely essential that we do not lose sight of the core target of Flexible New Deal, those who are the furthest from work.”
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