Jobless will be given a cash bonus to retrain in welfare shake-up

12 April 2012

The long-term unemployed and lone parents will get cash bonuses for retraining in a welfare shake-up ordered by Gordon Brown.

The Prime Minister will admit today that the focus of the controversial New Deal must shift from getting people into any possible job towards addressing their lack of skills.

The Prime Minister is seeking to paint himself as tough on welfare reform ahead of David Cameron's own proposals, expected to be unveiled within weeks.

Scroll down for more...

Windfall: The jobless will be given a cash bonus if they pass a training course under a New Deal revamp

The Tories are finalising a radical package modelled on tough systems in the US and Australia.

Benefit claimants would face harsh penalties if they refuse to take suitable jobs and key handouts would be paid for only a limited time.

The Government's proposals stop short of such drastic action - Mr Brown will reject the "failed approach of simply cutting benefits and hoping for the best".

But he will admit that, without radical change, millions of people who could be in work will be left on the scrapheap.

New Deal participants who successfully complete a course of training or reskilling will now get a cash incentive.

Although the level of the bonuses has yet to be decided, they are likely to be three-figure sums.

Mr Brown's signal of a major shift comes in a foreword to a Work and Pensions Department document being published today to mark the tenth anniversary of the New Deal.

People over 25 who have been out of work for 18 months must take part in the programme to keep receiving Jobseeker's Allowance. For 18 to 24-year-olds, the deadline is six months.

But there are doubts over the value for money of the scheme, in which employers are paid to take on an unemployed person.

It has been criticised as a massively expensive revolving door, with hundreds of thousands of people going through it over and over again.

Latest figures show that on average, the scheme costs the taxpayer £1,289 per participant and the bill between 1997 and 2005 was an estimated £ 3billion.

Experts say that, even without the subsidies, the growth of the economy would have provided jobs for as many as four-fifths of "New Dealers".

Mr Brown will insist today that the New Deal has been 'worth it' and helped more than 1.8million people into jobs.

But he will add: |"We need a reformed New Deal to help us face the challenges of the next decades.

"In the old days the problem may have been unemployment, but in the next decades it will be employability.

"If, in the old days, lack of jobs demanded priority action, in the new world it is lack of skills. Our whole approach to welfare must move on.

"In future, the best welfare will no longer be the benefits you have today but the skills you gain for tomorrow.

"We will combine tough sanctions for those who refuse to work or train with better and more targeted support for those most in need, to give them the skills and advice they need to get back onto the jobs ladder."

But Tory spokesman Chris Grayling said: "This is little more than an attempt to divert attention from Conservative plans, and shows Gordon Brown is much more interested in short-term political tactics than setting out a real vision for the future of Britain."

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in