As business leaders warn that we’re in danger of talking ourselves into a recession, there are echoes of Basil Fawlty’s famous injunction: ‘Don’t mention the war!’

The one thing we’re more likely to do after a warning like that is to talk about a recession. For Merrill Lynch in the United States, the verdict is that it’s here, which isn’t the most comforting news Alistair Darling will have received with his toast and cocoa this week.

In such circumstances, will the decision to divert neighbourhood renewal funding into tackling worklessness turn out to be perspicacious or short-sighted?

Well, let’s hear it for perspicacity. Our far-sighted government, seeing choppy waters ahead, decided early in the spending review process to address unemployment before it addressed them.

Like boy scouts, the motto was ‘be prepared’: money for neighbourhood renewal will be ploughed into areas with a track record of getting people into jobs.

But this poses problems. For some years policymakers have identified a core of households who are typically described as hard to reach: often unemployed for generations, with physical or mental health problems, poor education, and involved in crime, antisocial behaviour or drug misuse.

We know their pathways to work are complex and fraught with pitfalls: to suggest a job will end their difficulties is facile.

The working neighbourhoods fund, to be fair, is focused on the long term unemployed and on community-led approaches to their challenges.

But it makes two dangerous assumptions: first, that there is a causal link between employing individuals and regenerating their neighbourhoods; and second, that removing local discretion about priorities for neighbourhood renewal funding will produce more effective solutions.

The first assumption forgets that self-interest doesn’t run parallel to community interest. You can’t, and shouldn’t, expect individuals to stay put if they have found work: some will want to leave neighbourhoods they perceive as part of the problem.

That leaching out of ambition leaves disadvantaged areas deeper in the mire.

The second assumption runs counter to ministers’ pronouncements about devolving decision-making and empowering communities.

After more than ten years of talking about holistic strategies and joined-up thinking, the left hand doesn’t seem any closer to knowing what the right hand’s doing.

Underlying both assumptions is a view that those who aren’t working should be held at least partly to blame for their misfortunes.

It isn’t just the cynics who have labelled the new programme the Fecklessness Fund.

Julian Dobson, editorial director, New Start Online magazine

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