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1. The Committee notes the Government’s report for the period ending May 2002, in which it describes the main trends of the economic measures taken and their impact on employment and provides supplementary information on the development of active labour market policy measures. Supplemented by the data published by the OECD, the report demonstrates a gradual increase in unemployment which has rapidly accelerated in early 2003; unemployment during the first quarter of 2003 was estimated at 4.0 per cent as compared to 2.6 for the same quarter the previous year. The data also show a significant increase in long-term unemployment both in proportional and absolute terms. The Government states it has introduced various measures to address the problems arising due to the weak labour market including, inter alia, a considerable reduction in the number of work permits for foreigners, the promotion of regional development with the aim of rural job creation and the implementation of public works programmes to expand demand for labour and mitigate the effects of adverse economic conditions on workers.

2. The Government also reports that during the report period, expenditures in active labour market measures more than doubled. The bulk of new funds were used to implement the Government’s revised approach to vocational training as introduced in the year 2000 in the policy document entitled "Starfsmennt 2000" The policy introduces a revision of the functioning of the Vocational Training Council with the objective of changing its working methods in order to bring its efforts into line with changing needs of the business sector, companies and institutions. The Council now offers programmes aimed at meeting the new educational demands of the labour market, including programmes ranging from traditional vocational training to continuing education and special remedies such as training in social skills. The Committee has noted this information and would appreciate continuing to receive indications on how the government programmes and policies, aimed at overcoming the rising employment challenges, are kept under review within the framework of a coordinated economic and social policy, in accordance with Articles 1 and 2 of the Convention.