The report prepared for the Tanaiste, Ms Harney, on reducing Community Employment places by between 6,000 and 8,000 will cause widespread concern to voluntary and community groups.
However, there is an argument for more focused investment in tackling unemployment, and the savings to the Exchequer would be between £44 million and £58 million a year.
There are 41,000 unemployed people, lone parents, people with disabilities and members of other disadvantaged groups on CE schemes. The proposed cuts would reduce the figure to 33,000. The others would revert to the dole and other social payments.
There are already plans to transfer some 5,000 CE places into the "social economy" under Partnership 2000. This will reduce to overall numbers to 28,000.
The report, a copy of which has been seen by The Irish Times, was prepared for the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, by Deloitte & Touche. It recommends that funds currently spent on some CE schemes would be better spent on courses in specific skills training.
Seventy per cent of participants in such courses found jobs after completing training last year, compared with 35 per cent of CE participants. However, some CE-related programmes have placement rates as high as 61 per cent.
The report also recommends that the age at which people can enter CE schemes be raised from 21 to 25, "for participants in receipt of Unemployment Benefit, Unemployment Assistance and Lone Parents Allowance". The report proposes that participants in existing schemes be allowed to complete the current year of their course.
In support of the proposal to raise the age threshold, the report says: "The scheme is part-time in nature and therefore not the most appropriate introduction to the workforce for young people. Training schemes have higher employment rates and are a better option, particularly for young people who have not been unemployed for too long."
The report expresses concern at the rapid increase in the numbers of lone parents entering CE schemes, when general unemployment rates are falling. "CE is financially attractive for lone parents," the report states. It adds that the position of older lone parents should be reviewed later.
It contains a table showing that a lone parent with two children is almost £60 a week better off on a CE scheme than a married participant in a CE scheme with two children. This is because lone parents retain significant allowances on CE, to help them with the cost of child care.
The report emphasises that the aim of its recommendations "is not to cut overall spending on Active Labour Market Policies (ALMPs), but rather to better focus that spending with a view to maximum value for money."
However, groups including the Irish National Organisation of the Unemployed are already organising protests at Ms Harney's proposal to make it compulsory for under-25s to take up offers of "a job or other employability support" after six months on the dole.
Another aspect of the report likely to generate resistance among voluntary and community-based groups is the proposal that "CE should not be used by Local Authorities, the Department of Education and Science and other State bodies. These projects generally have weak linkages with the labour market, with few of the participants on such projects finding equivalent work subsequently."
This recommendation would mean that school boards would lose funding to employ caretakers, and voluntary health agencies for part-time care attendants.