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Tessa Jowell MP
"There are many claims and counter claims"
 real 28k

Monday, 10 July, 2000, 15:29 GMT 16:29 UK
New Deal cost 'underestimated'

Over 210,000 people have found work on the New Deal scheme
The cost of providing jobs under the government's New Deal programme for the young unemployed is "much higher" than the figure estimated by ministers, according to a committee of MPs.

Employment minister Tessa Jowell told the Commons Employment Select Committee she believed the cost of providing each job to be ''just under �4,000''.

But in a report to be published in full on Tuesday, the committee is expected to say that the cost may be more than that.

One Conservative MP on it says the true cost for many of the jobs was nearly three times that figure.

'Dead-weight'

Tory MP Graham Brady told the BBC the issue of cost had been disputed between the committee and Ms Jowell when she appeared before MPs in May.

He said: "The government itself accepts there is a 60% dead-weight, that is to say, 60% of those people would have got jobs without the intervention of the New Deal.

Mr Brady argued that if those people were discarded from the figures and if only those "sustained and unsubsidised" jobs were taken into account the cost of each job would rise to �11,000.

He added that "unemployment was falling more quickly before the New Deal was introduced".

Revolving door

Mr Brady said more than 100,000 people had already come off the New Deal scheme only to return to unemployment and then back to the New Deal itself.

"We are seeing taxpayers' money being spent just keeping people in the system," he said.

Responding to Mr Brady's analysis, Ms Jowell said: "He is speaking ahead of a select committee report to be published tomorrow and clearly it wouldn't be right for me to comment before I have read the report."

Explaining how she had arrived at her figures Ms Jowell said �650m had been spent finding jobs for 210,000 people.

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See also:

01 Jun 00 | UK Politics
New Deal 'an expensive flop'
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