Labour spends FIFTY times more handing out benefits than getting people back to work

Labour spends around 50 times more on benefits than on getting people back to work in several major British cities, a think tank has found.

In the Liverpool City Region, benefits spending is almost 70 times higher than employment support, at $4,569 per resident compared to just £66.

Researchers argue the welfare system is over-centralised and fails to cater to local needs.

Various job-seeker programmes are divided across Government departments, with local leaders given little oversight or control.

Britain's mayoral city regions - Birmingham, Manchester, Liverpool, Leeds, Sheffield, Newcastle, and London - all consistently lag behind the rest of the country.

The report comes before the publication of the Milburn Review on the youth unemployment crisis, which is likely to call for devolution of employment support.

Alan Milburn, the former Labour Health Secretary, will urge ministers to cut welfare to fund job support.

But the Centre for Cities argues welfare cuts alone will not help get the over one million young people not in education, employment or training (Neets) back into work.

Britain spends just 0.12 per cent of GDP supporting its citizens into work.

That lags behind almost all OECD countries, with only Costa Rica, Chile, Iceland, Mexico and the United States spending a smaller share.

Anthony Breach, director of policy and research, told The Times: "As a country, we aren't putting that much money into helping people out of work, get into work.

"Trying to get people who are currently outside the labour market, inside the labour market through support does take time, it does take money.

"There is a clear case for funding the extra resource the mayors need with some kind of restraint in welfare spending at the national level."

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The think tank is now calling for Labour to boost employment support funding to £4.6billion a year, up to 0.17 per cent of GDP.

It also argues that mayors should receive a share of the financial savings and additional tax revenues once employment programmes get people back into work.

He added: "If mayors are left holding the bill for employment support, but all the savings flow to central government through reduced benefit spending and higher tax receipts, then mayors will be forced to spend money without rewarding them for success.

"In fact, doing this could make things worse.

"The reason is that without financial rewards, mayors are faced with a perverse incentive to keep jobseekers on benefits, so they don’t face the cost of providing employment support."

Oliver Coppard, the Mayor of South Yorkshire, argues devolution is the "best long-term way of bringing down the country’s benefits bill".

And Bev Craig, the Mayor of Greater Manchester, backed the report and said her authority had long made the case for a "more joined-up, locally led approach".

A Government spokesperson said: "The Milburn Review will lay the foundation for sustainable reform, and we will not pre-empt its findings.

"That said, the Prime Minister has been clear that we should give power to local leaders who know their communities best and we are already devolving employment support through Trailblazers, our Connect to Work scheme and our Youth Hubs which are delivered in partnership with local organisations.

"We are also improving Jobcentres to create a more personalised work and skills advice service, supporting more people of all ages into work."