Like most aspects of social inclusion policy, the New Deal is an initiative local government is uniquely well-placed to deliver. Local government shines amongst New Deal employers, as employment minister Tessa Jowell herself admits.
The New Deal for the unemployed begins with a four month 'gateway' during which a New Deal adviser helps the unemployed person overcome obstacles to finding work through training or perhaps counselling.
This is followed by a six month stint in training, voluntary work, subsidised work, or with the environmental task force. After this, the New Dealers are supposed to be on their way to fulfilling working lives.
Knowsley New Deal manager Tracey Fishwick says: 'We lost quite a few in the early days. If you keep them for two weeks and don't coach them they just drift back on to the dole. Our additional training was not hitting the mark. They weren't coming in every day, they weren't coming in at all, they had personal stuff, they had financial problems, and peer group pressure.'
She suggests that for some young people, sitting in their rooms smoking dope is easier than the painful, demanding process of entering into wider society.
Knowsley's brainwave was to get the charity Youth at Risk to work with them. Youth at Risk delivers personal development programmes to disadvantaged 14 to 18-year-olds in conjunction with social services, the health service and police, and was already working in Knowsley.
Ms Fishwick says: 'They focus on kids who are at risk of harming themselves through drugs or crime, or dropping out of school. They work through the real difficult damaged kids. We said, how about if you deliver that training bit we're not getting right based on your principles but with older people in a work environment?'
The training aims to make people take responsibility for their lives - one of the great stumbling blocks of the New Deal. 'It's a difficult thing,' says Ms Fishwick. 'We don't go too deep, the one they do in the community does get a lot deeper.'
Knowsley's scheme was transformed. 'The way they work is very effective, challenging and powerful. Kids do go: 'Oh, I see what you mean, it's my responsibility. I'm angry because of XYZ, that's why I'm not going to school or I'm beating people up all the time'.'
Before Youth at Risk's involvement, Knowsley lost five or six in 20 trainees. Now it only loses one or two. 'Of these 75% go on to a job. It's unheard of in the New Deal.'
This suggests joined-up local initiatives are the way forward for social inclusion. Knowsley was able to make this leap through its contacts in, and knowledge of, its community.
Ms Fishwick says: 'Early in 1998, Knowsley decided it was going to use the New Deal as a way of tackling unemployment. One thing that's worked is the number of key people in the council that have a stake in the programme.
'Chief officers have a stake in it, the youth agency, health, education, they have all bought into it. Then you've got the political stake holders who have the links with the community. We have all been pulling in the same direction.'
Initially Knowsley put aside£380,000 for the first 18 months of the New Deal. When the minimum wage was introduced, the£90 a week it was paying the New Dealers had to go up to£112.
This meant they fell into the benefits trap and were no longer eligible for housing benefit. It also meant Knowsley had to find another£40,000 almost overnight, which it did thanks to the dedication of politicians and managers.
This is the key to a successful New Deal employer. Compare Knowsley with the wider picture as summed up in the Unemployment Unit and Youthaid's circular working brief:
'New Deal contracts should only be awarded to intermediary organisations that really understand their local labour markets and have strong connections with employers.
'Too often, participants are referred arbitrarily to jobs where they have little realistic chance of meeting an employer's specification and with little preparation for what to expect. Too often they are placed in jobs that lack any structured introduction to work-like appraisals and supervision or subsequent training for career advancement.
'Worst of all, hardly any New Deal agencies maintain communication with either employee or employer after the placement has been made. There is no funding incentive to do so.'
Ms Jowell sees local government as part of the future of New Deal: 'Local government has a very important role. Currently the take-up of the New Deal by local government is poor. I would like to see more involvement, and human resources managers looking at the business case for taking up the New Deal as part of their recruitment strategy. For those unemployed people not yet equipped with skills for work, local government can offer important work experience.'
She says the government will monitor the take-up of the New Deal by councils and is keen to hear views on how the scheme could work better. She admits the New Deal can improve, and says this is why a more intensive 'gateway' is being launched later this month.
She does not accept it is inadequate though, as many have alleged. 'The Labour market is dynamic. People move into and out of jobs all the time. The goal for New Dealers is not to move into a job and stay there for life. It's to move into a life of employment rather than unemployment. If people leave for jobs but quickly return to claim unemployment benefits the New Deal helps them again.'
She enthusiastically agrees that local government does make a success of the scheme where it takes it up and that it is exceptionally well-placed to do so because of its closeness to communities and services: 'Where New Deals have worked in local authorities that's been very successful. Local government has an important role to work with [the unemployed] in the course of their training and it's the fact that local government is the front door through which so much of social exclusion is tackled.'