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Foyers are playing a major part in delivering the government's New Deal for unemployed young people. Sarah Wellard looks at the innovative concept - which combines housing and job training - in practice

The City of London is not the first place you would think of putting a young people's accommodation project: Salters City Foyer is housed in a converted bank in the heart of the financial centre.

The project aims to steer homeless young people towards training and employment. As John Kuhrt, foyer manager, puts it: "Foyers are about getting the potential from young people. Homeless young people may have a lot of opportunities open to them, but they are cut off from them. The foyer is a safe haven, but it's also a springboard."

The foyer was developed by a consortium which included the Soho Housing Association and the Salters Livery Company, and is now managed by the youth homelessness charity Centrepoint. It provides accommodation and support towards training and employment for 44 young people aged 16 to 25. Four of the flats are equipped for disabled people, others for single parents. Downstairs, there are training rooms and a recruitment agency specialising in the needs of homeless people.

Some of the residents are in work but most are following some form of training, from basic literacy to degrees. All have been homeless or at risk of homelessness. A number have recently left care.

Robert Meah has lived at the foyer for 9 months. He left home at the age of 15 following problems with his step-father. He spent the next two and a half years sleeping on floors, and, when he had outstayed his welcome with relatives and friends, at short-stay hostels or sleeping rough.

Now aged 18, Robert has applied to do business studies at college and also for a position as a trainee chef at a local restaurant. Moving to the foyer has enabled him to make a new start. He says: "I didn't feel like I was going anywhere. But coming here, I realised that I wanted to do better things. I realise that I've got to do things for myself. You get the encouragement that you need. You get that little kick."

The security offered by the foyer is important to Robert. "Here there's always someone on the door so you know you're safe." But in six to nine months' time, when he's ready, foyer staff will help him find a flat where he will live independently, with continuing support for the first six months.

Salters City Foyer is one of 72 foyers in the UK, providing 3,500 bed spaces, with a further 30 under development. Borrowing from a French idea for linking accommodation and employment mentoring, the UK's first foyer opened in south London in 1992. Unlike their French counterparts, British foyers focus on disadvantaged young people with high levels of need. As well as providing accommodation and training and employment support, most offer other services which may be open to the public, ranging from restaurants to creches.

Most foyers are involved in the government's New Deal programme for young unemployed people, and there have been suggestions that they could play more of a role in relation to lone parents. Some are responsible for local delivery of the "gateway" programme, providing counselling, basic skills training, careers advice and job search facilities.

But the Foyer Federation rejects suggestions that young people's tenancies are tied to participation in the New Deal. Mark Gibson, the federation's spokesperson, says: "Many foyers do link tenancies to an action plan. But very rarely is a tenant evicted for failing to follow the plan - it's usually possible to agree a modification."

The foyer movement has also come under criticism for being expensive. A large slice of Housing Corporation money has gone into building them - around £23 million so far. Running costs for foyers are also relatively high. But given that social services may spend up to £200 a week placing a young person in bed and breakfast accommodation, foyer rents are a snip at around £55 to £85 a week. Victor Adebowale, chief executive of Centrepoint, says: "Our foyers are good value for money. They have a high success rate in terms of getting young people into jobs and they're not coming back." According to the Foyer Federation, 50 per cent of all foyer leavers are working, and a further 33 per cent are in training.

The Department for Education and Employment is carrying out an evaluation of foyers at the moment. Adebowale agrees that the evaluation will provide useful information, but stresses the importance of local, needs-based analysis. "A foyer should never be built because it's this year's fashion. It should only be commissioned as part of a proper homelessness prevention strategy - needs-led, and supported by statutory and voluntary agencies in the community and by young people themselves. Foyers should be about making services fit the needs of young people, rather than vice versa."

Kuhrt adds: "Foyers aren't a panacea for the homelessness problem. They should be part of a range of options, depending on young people's needs. It's wrong to polarise the debate."