Birmingham’s Tory-led council has slammed the Government’s decision to axe a job-creation scheme.
The authority warned that 2,500 people would lose the chance to gain a permanent job which could lead to full-time employment.
And it claimed that the Government’s replacement scheme, which will pay private contractors to help unemployed people find work, could carry a “stigma” which would alienate employers.
Birmingham City Council issued the warning in a detailed written submission to the Commons Work and Pensions Committee, which is holding an inquiry into the Future Jobs Fund.
This was a scheme set up by Labour to create new jobs for unemployed people aged 18-24 by paying employers subsidies of up to £6,500.
Although the subsidies are temporary, the aim is to give young people the confidence and experience they need to be successful in the jobs market. In some cases, the subsidised post might lead directly into a permanent position with the same employer.
Labour was committed to funding the scheme until March 2012 but George Osborne, the Chancellor, announced in May that he was closing the scheme, saving the Treasury £320 million.
Opposition MPs have condemned the decision, but they have now been joined by Birmingham City Council, which is led by Conservatives in partnership with Liberal Democrats.
The Future Jobs Fund in the city was managed by BeBirmingham, a “local strategic partnership” involving the authority and other local bodies including the Chamber of Commerce.
In its submission to the inquiry, the council said: “The early termination of the programme will mean the loss of a large number of very high quality employment opportunities currently funded though the Future Jobs Fund.”
Around 2,500 people in the city had benefitted from the Future Jobs Fund so far, the council said.
It added: “A further 2,500 unemployed people will be denied the opportunity to take part in a programme that gives them value, raises their self esteem, and in many cases gives them their first experience of paid employment.”
The Future Jobs Fund was “popular with employers”, the council said.
But it warned: “When applying for new jobs most people on Future Jobs Fund employment opportunities do not mention how their current job is funded. Being on a ‘programme’ . . . carries a stigma both for participants and for employers who realise that an applicant is on a ’programme’ This stigma could easily transfer to the Work Programme.”
The council said axing the Future Jobs Fund would lead to “the loss of the well developed delivery partnership that has very effectively linked the public, voluntary and private sectors in identifying and delivering high quality jobs for the unemployed.”
Birmingham MP Liam Byrne (Lab Hodge Hill) said: “The council is absolutely right about this.
“I visited a Birmingham job centre a fortnight ago to speak directly to staff there, and they told me that the Future Jobs Fund was giving people fast access to jobs.
“They told me they were not seeing those young people coming back, which means they were getting that first rung on the jobs ladder they needed in order to stay in work.”