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Billions frozen in funding review

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Ministers have frozen a flagship council-led job creation scheme aimed at tackling youth unemployment and have put a question mark over billions of pounds of transport and regeneration funding as all government spending since the turn of the year is reviewed.

The Future Jobs Fund (FJF), worth £1bn over 2009-11, enables councils, charities and other organisations to bid for cash to fund job creation schemes for unemployed 18- to 24-year-olds.

Since the scheme was announced last year, the Department for Work & Pensions has approved bids that aim to create 117,000 jobs. The DWP said the scheme would create 205,000 temporary jobs over its lifetime.

But the department has said the fund has now been frozen as part of a review of all spending commitments and pilot projects agreed by the previous government from 1 January. This includes 65 FJF bids approved by the DWP in January and February, which aim to create up to 13,000 jobs for young people.

But under the FJF model, 20% of funding is provided up front, with the remainder as jobs are filled, meaning even bids approved last year that have yet to fill their quota of jobs could have part of their funding reviewed.

That would include, for example, Bristol City Council’s programme, which promised to create 492 bids over two separate tranches, the second of which was approved in February. To date the council has filled 201 jobs, but the rest of the programme could be at risk.

A DWP spokesman said he could not “speculate” on the outcome of the FJF review.

The review of spending could also raises doubts over £3.7bn in transport investment announced in the run-up to the election.

This includes:

  • £580m to revitalise Tyne and Wear’s light rail system
  • £81m to extend the tram line serving Birmingham and the Black Country
  • £235m for a trolley bus system in Leeds
  • £335m for new roads to reduce congestion around the ports of Hull and Immingham.

A £5m pot for the regeneration of 25 deprived seaside towns, announced in March, and £60m allocated in the budget to refurbish ports for offshore wind manufacturers could also be axed.

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