Gordon Brown has announced plans to pay employers “golden hellos” of up to £2,500 for every person they trained who had been unemployed for more than six months.
The Prime Minister unveiled the £500 million scheme to help get more people into work or training at an employment summit in London.
Mr Brown said: “Failure to act now and to do so in coordination with our international partners would mean a deeper and longer global recession.
“It would mean temporary rises in unemployment becoming permanent. It would mean as in the past whole communities written off, and that would mean lasting damage to our economy and a bigger bill to pay in the future. And this will not happen on my watch.”
He also pledged extra support for those who have been unemployed for three months or more, which would include extensive job interview training, and a move to sign on weekly for benefit payments.
John Philpott, the chief economist at the Chartered Institute of Personnel and Development, told how it was “encouraging to see business leaders, trade unionists and government ministers coming together to explore ways of addressing rising unemployment.”
Mr Philpott said: “While it is undoubtedly true that we can’t avoid the effects of the global economic downturn, neither should we despair. We know what works when it comes to combating unemployment and the package of measures announced at the summit to help prevent the current rush of job losses from turning into long-term unemployment is a most welcome move in the right direction.
“As ever, the devil will be in the detail. Recruitment subsidies, such as the government’s proposed ‘golden hello’ payments, can be highly effective so long as they are carefully designed to limit deadweight, substitution and displacement effects and thus give a genuine boost to employment.
“In addition, we will continue to pressure the government to take further policy steps to boost job prospects, particularly if redundancies rise as sharply in the coming months as the CIPD expects.”
The Conservatives and Liberal Democrats have dismissed the measures as too little too late, and designed to cover up Mr Brown’s failing recession policies.
Steve Webb, the Liberal Democrat work and pensions spokesman, said: “Six months is too long for many unemployed people to wait before they get help.
“Someone who needs and wants to retrain should not be told to come back in six months’ time. They need help immediately.
“Gordon Brown is extending existing programmes which have so far failed. The economy needs new initiatives, not a rehash of old ideas.”
Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers, also cautioned against ignoring college’s other role as an alternative to school post-16.
Dr Bousted said: “We are pleased the Government recognises the role further education colleges can play in re-skilling people, including the long-term unemployed, to help them get into jobs. However, we do not want FE colleges to stop providing an alternative to school for young people over 16 who want to go onto higher education or employment.
“If colleges become nothing more than “skills factories”, then those young people will have nowhere else to go, and an invaluable educational resource will have been lost.”