30,000 in Wales off benefits to no job, says report
Welfare changes will see 60,000 people in Wales moved off incapacity benefits, with half leaving the benefits system with no jobs to go to, research claims.
The report for councils suggests a £100m job creation scheme for 20,000 by the Welsh Government to plug the gap.
The Welsh Government says it is committed to a new employment programme for young people.
The UK government's Department for Work and Pensions said it would not leave anyone "trapped on benefits".
The Sheffield Hallam University report by Prof Steve Fothergill and Christina Beatty will form part of discussions at a conference on the employment prospects for the valleys in Merthyr Tydfil on Tuesday.
It was commissioned by the Industrial Communities Alliance, which represents councils in some of the most deprived areas in Wales.
The research claims that the UK government's welfare change programme will not help get more people in Wales into work unless there is a significant increase in the number of job opportunities.
It urges the Welsh Government to act by establishing a programme directly targeted at those who stand to lose their entitlement to benefits.
It says that the reason for Wales having a higher number of working age people claiming benefits than the rest of Britain is down to a shortage of jobs.
In the conclusions to the report, the authors write: "Every effort should be made to promote a private sector revival, and regional economic development in the valleys and elsewhere must be central to these efforts.
"But the scale of the job shortfall means that in the short run there is a powerful case for a job creation scheme.
"What we're talking about here is not just temporary programmes to provide training or work experience for long-term Job Seekers Allowance (JSA) claimants but sustained job opportunities for a much larger group of men and women, especially incapacity claimants who otherwise stand little chance of gainful employment."
The researchers say the annual upfront cost of providing 20,000 jobs for those previously claiming incapacity benefit would be about £260m, but the net cost would only be around £100m.
They also calculate that to bring Wales' employment rate on a par with the average in more prosperous parts of Britain would require 170,000 more people in work, with 70,000 more jobs needed in the valleys alone.
Work and Pensions Secretary Iain Duncan Smith's suggestion that the Merthyr jobless should get on a bus to Cardiff to find work is also criticised.
The report says: "Worklessness in the valleys is unlikely to be reduced much by job growth in Cardiff.
"This is partly because employment growth in Cardiff is unlikely to be sustained at the same pace and partly because of the sheer scale of the jobs gap in the valleys."
Peter Slater, director of the Industrial Communities Alliance in Wales, said: "The long-term solution to worklessness in places like the valleys is a revival in the local economy, and in particular a rebalancing of the economy in favour of manufacturing and services in Wales. But delivering this takes time, even with the right policies in place.
"The new report shows that in the short-run Wales faces a crisis arising from the impact of welfare reform. Job creation needs to be at the top of the new Welsh Government's list of priorities."
A Welsh Government spokesperson said: "Getting people into jobs, and trying to keep people in their jobs, is a very important part of our programme of government.
"We are committed to creating an employment programme to create training and job opportunities for young people and will be making an announcement about this later this year. We are also actively looking to extend apprenticeship opportunities for young people."
A DWP spokesperson said: "We will not leave anyone trapped on benefits - that's why we are reforming the system to ensure work will always pay, and replacing incapacity benefit with employment and support allowance.
"People who are too sick or disabled will continue to receive our unconditional support, but those who are able to work will get specialist help through the work programme."