Local authorities recently won the right to be allowed to take on employees under one of four compulsory options offered to 18 to 24-year olds who have been claiming jobseekers allowance for six months or more.
But some have expressed concern about the destabilising effect on staff facing potential job cuts.
John Penney, economic development manager at Conwy CBC, said the council was losing staff and could not be a potential source of long-term jobs for new deal trainees.
There were 13 redundancies at the council last month and 'unions would go berserk' if it seemed the council was filling gaps with subsidised labour, he said.
Equal opportunities officer at Redcar and Cleveland BC, John Harbour said there were still floating staff after the council became unitary last year.
'It's not a large number but as a principle, while we've got people who haven't got a home why would we be offering places under the new deal?'
In deciding whether to be an employer, it would have to assess the needs of the new deal client group with matches and mismatches within the authority.
The council was keen to be involved in welfare to work and was proposing positive ways forward, he said.
Gwynedd Council personnel director Bill Davies said the council was expecting staff cuts in the coming year and taking on new deal employees would have to be looked at extremely carefully.
The council would contribute to planning provision and could provide short-term experience, 'but the snag is what role we have as an employer - that's my worry,' he said.
The government, unions, and local authorities have all highlighted the importance of building in safeguards to avoid job substitution.