This article is more than 7 years old

This article is more than 7 years old

A Labour-backed scheme to get unemployed people into work, which was scrapped by David Cameron for being too expensive, produced a net gain for Britain, according to a government report.

The future jobs fund, introduced in 2009 to get 35,000 long-term unemployed people back into work, was dismissed by the prime minister last year for being a badly targeted failure.

But an impact analysis for the Department for Work and Pensions has found that society gained £7,750 per participant through wages, increased tax receipts and reduced benefit payments.

Participants were calculated to have gained £4,000 and employers to have gained £6,850, with the cost to the exchequer calculated to be £3,100 per job.

Two years after the start of their time with the fund, former jobseekers were 16% less likely to be in receipt of welfare support than non-participants. This amounted to eight fewer days spent on benefits. They were 27% more likely to be in unsubsidised employment than if they had not participated.

The fund reduced the amount of time young people spent on benefits and increased the amount of time they were in unsubsidised employment, the report said.

The shadow employment minister, Stephen Timms, said the figures proved Labour's claims that the future jobs fund was a success and that ministers who scrapped the scheme had let down a generation.

"This government inherited a project that was working but they threw it away to make a cheap political point, casting young people out into the cold. That catastrophic decision has left Britain with almost a million young people out of work and long-term youth unemployment spiralling out of control," he said.

In January 2011, Cameron dismissed the scheme at prime minister's questions, saying it was "expensive, badly targeted and did not work".

He said: "We now have the figures for the future jobs fund. It was five times more expensive than some other employment programmes, it lasted for six months and, within one month, 50% of those taking part were back on benefits."