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Plans to prevent a hike in long-term unemployment beyond ‘the worst recession for a century' will be unveiled by town hall leaders next week. But LGA officials are worried it could be derailed by problems with the Government's welfare-devolution agenda. The LGA will publish research highlighting how the last two UK recessions devastated some communities, such as south Humberside, and led to dramatic increases in long-term unemployment. Paul Raynes, LGA programme director, told The MJ the aim was to hurry ministers' plans to devolve welfare-to-work programmes to local areas, as thousands of workers faced redundancies. LGA officials will meet with ministers, including business secretary, Lord Mandelson, in two weeks, to discuss options. Education secretary, Ed Balls, a close ally of prime minister, Gordon Brown, this week described the downturn as ‘the most serious global recession for more than 100 years'. The recession's severity is causing alarm across town halls dealing with job losses, increased welfare dependency and declining revenues. Privately, one council leader said he feared a ‘catastrophic' unemployment rate across his locality, ‘once the dust settles following the recession'. ‘My fear is we could face the sort of long-term unemployment we saw in the 1980s,' he said. Particularly at risk are older workers and unskilled youngsters. Two out of every five people registering as unemployed are aged 18 to 25. Work and pensions secretary, James Purnell, admitted his £1bn plan to localise welfare-to-work, the Flexible New Deal, had slowed because contractors wanted more money upfront to deal with rising caseloads. But Mr Raynes said: ‘Councils need the Government to progress welfare devolution. The recession is national, but its impact is local.'

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WHITEHALL

Leaders' fears over welfare agenda

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