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Support for jobs will disappear with planned public spending cuts

Future jobs are the biggest casualty as the Government took the axe to 2 billion worth of public spending yesterday.

A total of 12 projects that were approved by the previous government have lost their funding as part of the programme to reduce the UK's deficit.

Among those culled is the two-year Jobseekers Guarantee, which would have given a job or work placement to people out of work for more than two years.

Danny Alexander, the Lib Dem chief secretary to the Treasury, also confirmed a halt to the rollout of the Future Jobs Fund, which was to create jobs for long-term unemployed, in particular 18-24 year olds. The fund, founded last year, aimed to create 120,000 jobs and in December the then culture secretary Ben Bradshaw announced Future Jobs Fund money for 624 new jobs in sectors including theatres and music venues, digital archiving, media production and to further the Olympic sporting legacy.

The planned extension of the Young Person's Guarantee by a year to 2012 is another casualty. This scheme promised a job, training or work experience to unemployed 18-25 year olds. Together, these cuts will save £125.5 million.

The other controversial cut was the £80 million loan to Sheffield Forgemasters, which was to be matched by European funding. This would have enabled the company to expand, creating some 180 new skilled jobs, and would have given the UK a centre of excellence in the global civil nuclear supply chain at a time when the Government has been stressing the need to rebalance the economy away from dependence on the financial sector.

Alexander said the cuts were "difficult decisions" and "painful ones for some of the communities affected", but blamed the previous Labour government for making unaffordable commitments. However, shadow work and pensions secretary Yvette Cooper said it was mad to cut support for jobs and the economy right now.

"Unemployment is still too high. That's why it would be crazy to axe 90,000 Future Jobs Fund jobs and cut support for the economy now. Independent experts have warned that their actions risk pushing unemployment up to three million. We believe that unemployment is never a price worth paying."