Posted: 13 January 2011, in Press Release

Social enterprise leaders have renewed their calls on the government to use the sector to create employment as debate over the scrapped £1bn Future Jobs Fund scheme becomes more and more politicised.

On Monday the fund, used by hundreds of social enterprises to create six-month placements, and then permanent positions, for the long-term unemployed, was championed by Labour leader Ed Miliband.

This morning employment minister Chris Grayling and Shadow Work and Pensions secretary Douglas Alexander clashed over the effectiveness of the programme, especially in regards to helping young people, on BBC Today.

Weighing into the debate Social Enterprise London (SEL) CEO Allison Ogden-Newton said SEL used the fund to create 500 positions in 32 London social enterprises with 65 per cent of those placements converted into continuing paid employment.

Ogden-Newton said: ‘I was upset to see the Future Jobs Fund criticised as underperforming. I don’t know what the data is overall but we do know that social enterprises have performed incredibly well.’

She said this was because social enterprises were chronically undercapitalised and having the person’s salary paid for the first six months represented a form of investment which in many cases allowed the social enterprise to take the employee on permanently.

‘The fact that they’ve then retained the person shows that they’re not cynical about this, but they wouldn’t have employed them in the first place without the incentive,’ said Ogden-Newton.

‘In a recession we’ve really got to think through how you help employers create jobs, not just fill the ones that they’ve got, and that means we are talking about pretty well thought through incentives.’

Ogden-Newton added that, although the Future Jobs Fund was criticised as being expensive, ‘anyone who has lived through the 80s knows that the cost of creating a generation of unemployed and under-employed is unacceptable’.

Social Enterprise Coalition (SEC) head of policy Ceri Jones said that the Future Jobs Fund had ‘demonstrated real success’ and that SEC wanted to see a ‘continuing role for social enterprises in the new Work Programme’.

However, Ogden-Newton pointed out that SEL’s success with the Future Jobs Fund was due to the professional mentoring programme each young person received and she was afraid sub-contractors in the Work Programme would not have the freedom or cash to deliver similar support.

The government said that it scrapped the Future Jobs Fund to provide 50,000 more apprenticeship places than was planned under the previous government.

A spokesperson for the National Apprenticeship Service said that this money has been allocated through the Skills Funding Agency and that it is ‘currently on track to deliver the ambition’.