'Each New Deal job costs £27,000'

Gordon Brown's flagship New Deal has cost the taxpayer up to £27,000 for every job created, a damning study has found. The analysis of the Chancellor's policy says that far from creating two million jobs as he claims, the real figure is between 109,000 and 230,000.

According to the study published tomorrow by the Right-wing think tank Politeia, New Deal has " distorted the job market and cost the country more than £3billion".

Each job found has cost between £13,000 and £27,000, it says.

The finding will infuriate Mr Brown who is expected to highlight the New Deal in Labour's election manifesto as a government success.

However, the pamphlet, by Tory frontbencher Oliver Heald and Mark Waldron, says that the scheme has been targeted at the wrong social groups while ignoring

others such as the disabled and older people who find it hardest to get jobs.

Although ministers claim some 445,000 young people have found work under the scheme, the real figure is closer to 20,000, it says.

"In fact, the evidence suggests that most of those who do find work would have found it anyway," says the study, Auditing the New Deal: What Figures for the Future?

"And there are other problems, for instance, of job substitution or displacement, where employers might not employ other workers because of the scheme.

"At the same time certain groups of unemployed people, especially the disabled and the over-fifties, who want to and can work, are not helped. The picture emerges of a vast, ineffective and bureaucratic scheme, expensive to the taxpayer, yet futile," it concludes.

The authors call for New Deal to be scrapped for young people and lone parents with young children.

Arguing that the Government should abandon its attempts to interfere in family life, the authors say schemes for young people should be aimed not at those with small children but those with children at secondary school.

Mr Heald, the shadow leader of the House, says the Left's love affair with "vast state-run schemes of social engineering" has been an expensive failure.

"Funds should reward success instead of being squandered on bureaucracy. The lessons from overseas, especially that of ' America Works' should be learned," he writes.