A government scheme to improve employment numbers risks failure unless it receives up to £1bn in extra funding, MPs have warned.
The Work and Pensions Select Committee said the Flexible New Deal – which has the aim of helping the long-term unemployed find jobs through the use of private and voluntary sector providers – requires money “as soon as possible” to cope with up to three times as many applicants as was originally predicted.
The committee chairman, Terry Rooney MP, described the funding arrangements for the scheme as “inadequate”.
“As the labour market contracts it becomes even more important to ensure that those who have been unemployed for a long time receive the support they need to return to work,” he said.“Unless the budget for the Flexible New Deal is increased, there is a real danger that providers will not be able to cope with the number of [long-term unemployed] coming through their doors.
“The potential consequences of this for those most in need of expert support, and their prospects of rejoining the labour market, should give the Department for Work and Pensions (DWP) real cause for concern.”
A DWP spokeswoman welcomed the committee’s findings and said the government would consider its recommendations.
“We know times are tough and that those who become long–term unemployed face a particularly difficult time,” she told Personnel Today. “That is why we are working with the bidders for the Flexible New Deal to ensure their proposals are robust enough to meet the demands of changing economic conditions.”
Last year, an independent think-tank said the Flexible New Deal had “serious flaws” that could cause contractors to back off.
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