HM TREASURY 4
17 March 1998
BUDGET BOOST FOR WELFARE TO WORK
GORDON BROWN ANNOUNCED FURTHER EXTENSION OF THE NEW DEAL
______________________________________________________________
Chancellor Gordon Brown today heralded the next stage of the
Welfare to Work initiative with a series of new initiatives to
extend employment and training opportunities.
He announced:
- new and innovative pilots to extend the New Deal to the
over 25's. 70,000 opportunities, at a cost of 100 million
pounds, will be provided for the long-term unemployed.
The pilots will be based on the intensive programme
pioneered through the New Deal for 18-24 year olds - but
will be targeted on the individual needs of the older
group. The pilots will be rigorously evaluated and,
together with the results of the New Deal for 18-24 year
olds, will inform the further development of Welfare to
Work over the Parliament;
- as part of these New Deal pilots, there will be special
assistance tailored to the needs of the over 50's -
recognising the particular difficulties they face in
getting back into work;
- a New Deal for the partners of the unemployed. Partners
of the unemployed who are themselves out of work (95 per
cent of them women) have not had access to employment
programmes on the same basis as the claimant unemployed.
To address this imbalance, the Chancellor has set aside
60 million pounds from the Windfall Tax receipts to
ensure that partners over 25 have the option to receive
the help they need to get back to work. Childless
partners aged under 25 will be included in the New Deal.
Further details of these new opportunities will be set
out in due course;
- a New Deal for Communities, to provide new opportunities
to those in the most deprived estates, where problems of
worklessness interact with other social and economic
problems to create a vicious spiral of poverty and
deprivation. The New Deal For Communities will begin to
tackle social exclusion on the worst estates, by
improving neighbourhood management and increasing
employment opportunity and quality of life. It will be
part of a broader strategy to make existing public
expenditure work more effectively in deprived areas and
extend economic opportunity to all communities. To make a
start tackling these problems the Chancellor has
allocated 15 million pounds for 1998-99 to set up a
number of pathfinder projects, which will inform the
development of the full initiative.
- a series of measures to provide a New Deal for disabled
people. Further details are set out in HMT 11;
- the Budget also provides a further boost to the New Deal
for lone parents. Over 3,300 lone parents have joined
the New Deal in the first 6 months of the scheme, and
already over 1,100 have found work. To improve take-up
and effectiveness further, the Chancellor announced a new
10 pounds million initiative to pilot new ways of helping
lone parents back to work. The Chancellor also announced
changes to the benefit rules to introduce a 12 week
linking rule. As a result, lone parents who were on
benefits before April 1998 can take a job knowing that
they will not be worse off if the job turns out to be
short-term, and they have to return to benefit. Lone
parents will also be one of the groups benefiting from
the Working Families Tax Credit, and the new help with
childcare.
The Chancellor also set out a progress report on the New Deal
for young people, which began in January in 12 pathfinder
areas, and will go national from April 6th. In the first 9
weeks, 12,800 young people have entered the programme, 8,800
have been matched to an employer, and 620 have already found
work. The Chancellor also announced:
- the biggest commitment to the New Deal so far - 40,000
employment opportunities across the hotel and catering
industry. Radisson Edwardian Hotels, in conjunction with
the British Hospitality Association, will use the New
Deal to address a skill shortage problem in this
expanding industry. Training for the new recruits will
be provided through a new national network of training
centres, partly funded through the training subsidies
available through the New Deal;
- that a further 50 million pounds would be channelled into
the New Deal gateway, to enhance the support available to
the most disadvantaged young people in the gateway - and
to boost the mentoring initiative to support more young
people through the often difficult process from welfare
to work. Up to 100,000 young people will now benefit
from trained New Deal mentors, with many more given
support once they enter their New Deal jobs or training
courses.
Commenting on these major new developments of the Welfare to
Work initiative, the Chancellor said:
"Throughout 1998, our New Deal initiative will bring new hope
to hundreds of thousands of young and long-term unemployed
people, to lone parents, and to the disabled. Progress so far
has been very encouraging - the New Deal is already starting
to deliver results. This Budget extends the initiative
further - to bring new employment opportunities to those
previously denied them."
Welcoming the New Deal pilots for the over 25's, Secretary of
State for Education and Employment David Blunkett said:
"This is a tremendous boost for long term unemployed adults.
Help will be individually designed for each person in the
pilots and we will build on the expertise that has been
developed through the New Deal for 18-24 year olds. Ensuring
that all our people have the chance to work, to earn and to be
independent is crucial for our competitiveness and social
cohesion."
Welcoming the resources made available for the development of
the New Deal for Communities, Deputy Prime Minister John
Prescott said:
"The Chancellor and I will be working closely with colleagues
across Whitehall to develop this initiative. We will build on
existing good practice to deliver integrated and sustainable
regeneration and promote economic opportunity in the most
deprived neighbourhoods".
Commenting on the new measures for lone parents, Secretary of
State for Social Security Harriet Harman said:
"The success of the New Deal for lone parents means that the
programme is here to stay. It is now inconceivable that we
could ever return to the situation where lone parents were
consigned to a life on benefits. This Government is committed
to extending opportunities to lone mothers, particularly when
their youngest child starts school. When the scheme is rolled
out nationally later this year, more and more lone parents
will be given the opportunity to improve their family's
standard of living".
The Welfare to Work initiative is one element of a wide-
ranging strategy to promote employment opportunities for all.
Other elements of this strategy announced by the Chancellor
include:
- measures to promote economic stability, to ensure the
stable macroeconomic background which provides the
crucial underpinning for the Welfare to Work initiative
(set out in HMT 2);
- measures to make work pay, through reform of the tax,
benefit and national insurance system, to ensure that -
where people move from welfare into work - they can
improve their financial situation and lift their family
out of poverty (set out in HMT 3 and HMT 5);
- new measures to invest in Britain's skills needs, and to
invest in Britain's schools (set out in HMT 12).
NOTES FOR EDITORS
For further details see also:
HMT 2 Chancellor sets sights firmly on economic stability:
Code for Fiscal Stability issued
HMT 3 Government launches a new deal for working families:
making work pay
HMT 5 Gordon Brown announces radical national insurance
reform
HMT 11 Budget for Disabled People
HMT 12 More money to reduce waiting lists and class sizes
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