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Budget
17 March 1998
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
