There may be much debate over the effectiveness of the New Deal scheme in the UK, but in Ireland equivalent programmes in place have received a damning report which concludes there is significant wastage and "dead weight" in the way the programme is run, saying it is failing to help those who really need it.

According to the Irish Independent, Indecon International Economic Consultants recommended that the scheme, which currently involves 42,000 people, should be greatly reduced, in part because it targets the wrong areas of the economy.

Money has been made available for the scheme to assist the long-term unemployed with finding work since 1993, but the numbers taking part have increased more than ten times since then, with the scheme currently costing around £350 million a year, says the paper. In the UK, the government has committed around £1.48 billion to helping up to 500,000 young people find work as part of the new deal scheme.

The consultancy firm which carried out the study found that extra monetary support given to help people return to work was having little effect, as over half would have returned to work even if this wasn't available. It also found that help being made available to those wanting to start up in self-employment was benefitting those who would have started up in business regardless of whether the help was available, such as taxi drivers and couriers. The report's authors say that "this is a waste of resources which would be better spent elsewhere". It calls for greater selection to establish those who will benefit from the scheme, and to ensure that those taking part do fall into the category of 'long term unemployed'.

Indecon also expressed concern that those going into self-employment were benefitting from additional assistance which may give them an unfair advantage over others in a competitive market such as minicab driving. Over the last ten years there has been a huge increase in demand for jobs in the service sector in Ireland as the economy benefitted from expansion in technology, finance and pharmaceutical industries.

The Department of Social, Community and Family Affairs defended the findings, saying that it was inevitable that the scheme would benefit some more than others.

The Audit Commission recently launched an in-depth study of the New Deal scheme in the UK, following concerns from a number of sources about the effectiveness of the scheme.