Managers have been given strict deadlines to recruit 1,000 unemployed people into the NHS after official figures revealed a poor uptake of the New Deal welfare-to-work scheme.

After 12 months, just 126 New Deal candidates have been taken on in the NHS. Department for Education and Employment statistics show that just 1,989 people have been employed under the New Deal across the public sector.

Guidance issued by the NHS Executive says: 'It is clear much, much more needs to be done, ' and ministers have agreed an action plan to ensure that all trusts and health authorities participate.

All NHS employers must sign deals with Jobcentres by 31 December and the 1,000 new jobs commitment must be met by June next year.

The health service circular, signed by NHS human resources director Hugh Taylor, says the government expects the NHS to make a 'major contribution' because it is a 'significant public sector employer' and NHS organisations 'can play a positive part to improve the overall health of their community directly by employing people who have been unemployed'.

It acknowledges that there have been major obstacles, including weak links between hospitals and Jobcentres, staff redeployment because of structural change, insufficient numbers of suitable candidates, and the poor image of the NHS as an employer among New Deal candidates.

But it says there are also 'shining examples' of good practice and cites initiatives taken by Newcastle upon Tyne health action zone and Leeds Teaching Hospitals trust.

Donald Reid, joint acting chief executive of the UK Public Health Association, said he sympathised with trusts that claimed they were wilting under the pressure of initiatives and job cuts.

But he said: 'We are disappointed with these figures because there is a strong link between unemployment and ill health. We understand the problems across the health service but this is a central public health issue.'

Roger Kline, national health secretary of the MSF trade union, said:

'Human resources initiatives are not seen as sufficiently sexy to top some managers' priority lists.'

But he acknowledged: 'While we want to see more employment, it is true that many trusts are so cash-strapped that they have higher priority things to spend money on.'

A third of all HAs and trusts, including one in health secretary Alan Milburn's Darlington constituency, have not signed employment agreements with Jobcentres.

South Durham Healthcare trust, which runs Darlington Memorial Hospital, plans to sign up to the New Deal on Monday.

A spokesperson said: 'We could have signed up a year ago but we were undergoing mergers and restructuring so it would not have been practicable to identify suitable vacancies.'

County Durham HA signed up in September last year and has employed two people.

Morecambe Bay HA, which covers health minister John Hutton's Barrowin-Furness constituency, has yet to sign up. Morecambe Hospitals trust has signed up, but has not managed to recruit suitable candidates.

Human resources director John Lennie said: 'We have been liaising closely with the local Jobcentre. We tried to recruit a number of candidates but some failed to turn up for interview and some were not suitable.'

In Southampton, health minister John Denham's constituency, Southampton University Hospitals trust has secured jobs in portering and catering for two people and is hoping to place a third.

But a spokesperson said recruitment had been made harder by demands for efficiency savings and waiting list initiatives.

See comment, page 19.

Welfare to Work: the New Deal in the NHS. www.doh.gov.uk/coinh.htm