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Pre-Budget Report
Treasury 6
25 November 1997
New initiatives under the Welfare to Work programme are to be developed to meet the challenges of the new labour market, announced Chancellor Gordon Brown in his Pre-Budget report today.
The Chancellor said:
"Britain's future success depends on people moving off welfare and into work. I am improving the New Deal for lone parents with a massive boost for childcare, which will particularly help lone parents move from welfare to work.
"Skills shortages have in the past prevented further falls in unemployment. I am determined that, as we are currently at a similar stage of the economic cycle, action is taken on skills shortages to help tackle the problem.
"The programme I have outlined today will also help the long-term sick and disabled get back into work if they wish to."
The New Deal for lone parents is already offering, in eight areas, personalised assistance with job search, training and childcare. It will be introduced nationwide from October 1998. The Chancellor today announced two further developments to improve it:
The Chancellor announced today a 300m Pounds investment strategy for childcare. Details will be announced tomorrow by the Secretary of State for Education and Employment and the Secretary of State for Social Security. Parents - especially lone parents - need local access to high quality affordable childcare. Over the next 5 years, the Government - working closely with local partners - will provide help to every community that needs it to set up new out-of-school provision: a massive expansion of local childcare provision designed to meet the needs of working parents across Britain. This strategy will deliver up to 30,000 new clubs and up to one million new childcare places. The New Deal also offers 50,000 unemployed people the opportunity to train as child carers and will help deliver this strategy.
In the last Budget the Chancellor allocated 200 million Pounds for a New Deal for sick and disabled people who wanted help to get back into work. Today he announced that the voluntary programme would involve tailored help from specialist caseworkers - including work trials and help for employers. He also announced that the programme will begin in the Spring with innovative projects involving the private and voluntary sectors.
The economy is now at a key stage in the economic cycle - where in the past skills shortages and wage inflation have prevented further reductions in unemployment. There are already worrying signs. The Skills Needs in Britain survey shows that employers have difficulty filling 120,000 vacancies because applicants lack the essential, basic skills to do the job - industry estimates point to 60,000 IT posts, 10,000 posts in engineering and 5- 10,000 posts in construction.
David Blunkett's Skills Task Force will bring together employers to examine the problem and advise the Government on how skills shortages should be addressed. The New Deal will help, but one cause of skills shortages is the high up-front costs of training new employees. To address this problem, the Chancellor today announced that employers who take a new employee under the New Deal will, if they choose, be able to receive up to three- quarters of their employer subsidy up-front - to pay for immediate training to meet skills shortages. This new choice for employers will be brought in as soon as possible.
Travel to work costs can be a significant barrier for young people moving from welfare to work. The Chancellor today announced that some of Britain's leading bus and rail companies - including National Express and Stagecoach - have agreed to offer young people on the programme discount travel.
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Pre Budget 1997 Press Notices index page
