More detail and CBI support for the New Deal

As the UK Government announced the details of its "New Deal" for unemployed people in October 1997, the Confederation of British Industry (CBI) announced its support for the measures.

On 9 October 1997, employment minister Andrew Smith announced the precise details, or "Design", of how the Governments "New Deal" (UK9707143F) will help 250,000 young and unemployed people to move out of welfare and into work. The details show how determined the Government is to cut unemployment and poverty: not only is it aiming to remove people from the ranks of the unemployed, but it is also concerned to provide high-quality jobs.

The Design document highlights these quality standards and the crucial role that employers and business are expected to play. The New Deal offers four options to young people who have been unemployed for six months: a subsidised private sector job; work with a voluntary sector employer, with a weekly wage equivalent to social security benefit plus a fixed sum for six months; a job with an environment task force; or full-time study on an approved course. The new document confirms that within the "employer" option, both part-time and full-time work, including training, will be included. Other "quality features" are as follows:

  • "mentoring" - access to support and benefit of experience of role models;
  • "tasters" - limited periods of work experience without putting social security benefits at risk;
  • quality-control measures such as regional assessment panels to assess local partnerships' delivery and contracting proposals;
  • help with childcare on all New Deal options; and
  • from 1998, help to move from unemployment to self-employment.

To be eligible for a subsidy of GBP 60 a week for 26 weeks, the vacancy offered by employers must provide a minimum of 30 hours work a week, including the equivalent of one day of training a week. Vacancies offering an average of between 24 and 29 hours a week will be eligible for a subsidy of GBP 40 a week. Where possible, jobs will continue beyond the six-month period, and if they do not the employer will need to show that the six-month period of employment offers a high-quality opportunity for the young person to improve their employability. Employers taking on New Deal employees must also agree not to displace existing workers to create the vacancies and not to make a profit from the subsidy. A confidential "hotline" will be available to employees to report possible abuses.

The CBI stated on 9 October that it will support the New Deal, believing that it will play an important part in helping unemployed people back into work. However, the CBI thinks that a vital component of the New Deal is that young unemployed people should be given skills and experience necessary to bring them back into the labour market. As such, it believes that all four options available through the New Deal will provide a flexible package to suit the needs of the different groups and employers will be providing opportunities for young people with appropriate skills and attitude.

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