In response to last week’s budget, the Local Government Association (LGA) said it was encouraged that the government has listened to its requests for a council-led approach to counter youth unemployment.

Chancellor Alistair Darling’s Budget, which was released last week, pledged to create up to 250,000 positions delivering local services, including traineeships in social care.

Earlier this month the LGA urged ministers to direct millions of pounds into smaller scale council-led projects that would kick-start the economy and create thousands of jobs almost immediately.

Cr Margaret Eaton, chairman of the LGA, said it was an “encouraging” move. 

“Previous recessions have left tens of thousands of people unemployed for years,” she said.

“It is encouraging that action is being taken to target this, and we now have to work to ensure that councils have genuine control to spend the money in the interest of local people.

“From giving town centres a facelift and insulating people’s homes to filling in potholes, town halls are ready and willing to boost the local economy,  creating jobs and getting things moving again.”

Cr Eaton said the extra money would have the most impact if it was channelled through local authorities that could get started on local projects immediately.

Other measures announced in the Budget included an extra £250 million to create an additional 54,000 places at further education colleges in the next academic year. From April next year, local authorities will be responsible for 16 to 19-year-old education and training.

There was also £100 million for local authorities to build more energy efficient housing, part of a £500 million shot in the arm for the housing market to re-start projects that have stalled due to the recession.

A further £435 million will be spent on energy efficiency measures in homes, businesses and public buildings.

Unemployment in the UK rose to 6.7 per cent in February with more than two million people out of work.

“Town halls are taking decisive action to protect local people and small businesses from the worst effects of the recession. They are helping to keep people in their own homes, offering support to the unemployed and helping small companies stay afloat.”