It's easy to be cynical, writes Alan Sinclair, who argues that the Government's New Deal to tackle unemployment must be given a chance to work.

OUT went the Russian czars, in came the communists and with them perhaps this cen-tury's most profound form of constitutional change. For dissidents it was business pretty much as usual. Siberia was where the czars sent their undesirables and Siberia was where the

enemies of the state got packed off by the communists.

Constitutional change is no guarantee of change in behaviour. For two decades, employment has been a low priority in Government policy-making. Now Labour has introduced the New Deal to tackle unemployment and placed it, alongside constitutional change, as one of its key tasks in office. It must be hoped that the commentators and aspiring Members of the Scottish Parliament will give the New Deal a fair wind and not an easy kicking.

What the New Deal sets out to do is tackle a deep-seated and sensitive issue: how do we get unemployed people into jobs and help them stay in work?

In essence, the New Deal is about improving the employability of people out of work by matching them to

jobs or improving their attractiveness

to employers by providing a wage subsidy, work experience, and some training. It is an enormous programme and has guaranteed financing for four years.

In short, it is about improving the supply of labour to the job market.

A panoramic view across Scotland would show that we have, overall, a net shortage of jobs. However, Aberdeen and West Lothian employers are increasingly finding it difficult to get the right people. That is still not the case in Glasgow, Dundee, and Lanarkshire, and even in Glasgow you cannot compare unemployment in Bearsden with its near neighbour, Drumchapel.

New Deal policy-makers have recognised that we do not have enough jobs for all of our New Deal trainees. At this stage you could give up the ghost and revert to cynicism or have a go and live with imperfection. So far, in its early months, the New Deal has led to a Kitchener-type recruitment drive through large employers encouraging them to take on New Deal people or, at least, offer them a period of decent work experience.

Our large companies, especially in Scotland, have responded in a comprehensive and enthusiastic way. Many are doing it because they know they must play their part as good corporate citizens; others because they want to be seen, for corporate affairs reasons, to be in the Government's good

books. To the people looking for jobs, however, active participation by these companies is more important than their motivation.

Experience in other countries, most noticeably Australia where a similar programme was run, showed that the most critical group of employers were those in small businesses. In general, small employers were growing and were not going through the down-

sizing of their big brothers. In total, more places were offered by small companies and they retained a higher percentage of the people at the end of the subsidised period. A similar phen-omenon could be expected here.

A recent survey by the Joseph Rowntree Foundation studied the tale of 850 unemployed people at the start of the 1990s, and then again in 1995. It found that five years on, a third were still out of work. Among those who found work, three-quarters could not get anything better than part-time or temporary posts. Such is the extent of the challenge facing the New Deal. From my experience in the Wise Group, I have learned that the vast majority of long-term unemployed people are desperate to work. What is hard is helping people who have never worked, or who have been out of work for years, to gain enough self-

confidence to take them forward and withstand the knocks of working.

Today there are two types of jobs across the country that are not being filled. First, technician and skilled jobs that would tradition-ally need about two to three years training on top of a reasonable school performance. Second, lower level service jobs, often connected to hospit-ality, where rates of pay are low and the hours variable. Such jobs often leave possible recruits wondering if it is worth giving up the discomfort, but none the less guaranteed income, from their benefits. New Deal can help fill both types of vacancy, but the trick will be to let people move from the latter to the former and to encourage the training process to last longer than a brief stint in a Government programme.

But we still have the problem of a net shortage of jobs. In the long-term a solution, if a solution is to be

found, will come through successful business and economic development performance. New businesses will be born, existing small businesses will grow, and mobile investment will come to Scotland.

The jobs created will be more evenly shared out across areas and between households. The Scottish Parliament must be active in ensuring we achieve such goals and dealing with the particular problems in Scottish labour markets from Annan to Armadale.

The new Scottish Parliament will still work within UK welfare benefit and Department of Employment and Education spending and rules. What seems more important than who calls the shots is the need for employment policy to be given a priority in our economic and political management, and for that policy to be improved year on year. Making New Deal work using the powers of the Scottish Parliament will require an in-depth examination of all aspects of Scottish policy, from housing to economic development. Such a consistent approach is needed, and will, in four years' time, determine Scotland's success in the New Deal.

n Alan Sinclair is chief executive of the Wise Group and a member of the Government's New Deal task force in Scotland. He will be speaking this Saturday morning at the New Scotland conference in Glasgow, organised by the Centre for Scottish Public Policy, and sponsored by The Herald. For details of timings and tickets for the whole weekend of discussion and debate, phone the Tron Theatre box office on 0141 552 4267.

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