Labour is exploring radical plans to give local authorities like Leeds a new role in cutting our dole queues – and bring down benefit spending – by helping to shape the way billions of pounds of employment funding is spent.

The Party this week published a report, “No Place Left Behind”, just a coupe of days after new Labour Market figures revealed that Britain’s job crisis is deepening.

In his speech “The Road to Full Employment” to IPPR North, Liam Byrne attacked the Government’s comprehensive failure to re-skill unemployed people for local jobs and said the time has come to unlock the power of local councils in tackling Britain’s job crisis. Labour is also looking at approaches in Canada and Germany where local authorities are more involved in back-to-work programmes, regeneration funding and re-training – saving billions in benefit payments on the way.

He argues that in tough times and an era when there is less money around, Britain needs a similar approach because it is more important than ever that the £3 billions allocated for the Work Programme is properly spent and that long-term unemployment – one of the chief factors in driving up social security bills – is properly tackled.

Mr Byrne contrasts the pioneering work of such authorities as Newham, Liverpool and Glasgow in tackling youth unemployment with the failure of the Government’s Youth Contract and Work Programmes – which have now been shown to perform worse than doing nothing.

He renewed his call for Ministers to bring in Labour’s Compulsory Jobs Guarantee to ensure that anyone locked out of work for more than two years – or one year if they are under 25 – is offered a real paid job, one they would be required to take or face losing their benefits.

Byrne argues that Iain Duncan Smith is now comprehensively failing his own ‘Eaasterhouse Test’ that he set himself in tackling worklessness in Britain’s poorest communities.

Publishing new figures from the House of Commons Library, Mr Byrne shows:

§ on three quarters of Britain’s estates – where unemployment is highest – it is getting worse.

§ on two-thirds of those estates, long-term unemployment is getting worse.

§ cuts to poorer communities are biggest where jobs are fewest.

Drawing on lessons of the 1944 White Paper on full employment, Mr Byrne backs the principles set out by Michael Heseltine for much greater devolution of power to local authorities but then argues that Iain Duncan Smith is now a “road-block to reform”, preventing councils from making a difference in tackling local dole queues.

Mr Byrne points to reforms being implemented in Canada and Germany:

In Canada localised delivery of back-to-work programmes gives local government the flexibility to establish their own priorities including:

§ Skills development support: financial assistance for individuals obtaining skills for employment
§ Targeted wage subsidies: to encourage employers to hire people they wouldn’t normally hire
§ Job-creation partnerships: providing opportunities to gain work-experience – and so the skills to
achieve sustained employment.

In Germany, job centres work closely with surrounding schools and have deep roots in the local labour market – which allows them to engage with employers far beyond the low-skill, low-pay sectors.

Byrne suggests local government is well-placed to coordinate programmes for skills, education, worklessness, transport, physical regeneration, health, housing, economic development and planning.

Meanwhile in Britain, top authorities have told Labour that the Government’s DWP can hold them back by:

§ working to incorrect assumptions dreamt up in Whitehall that bear no relationship to local areas
§ implementing top-down policies without consultation that are often totally wrong for local areas
§ being unable to share information – which ends up in wasting money and prevent experts on the ground
from joining up services to get people into available jobs.

Labour’s research, quoted by Mr Byrne, shows councils believe the DWP is far too centralising. Councils like Leeds want Ministers to get out of the way so they can get on with the business of getting people back to work.

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