UK Govt to take targeted, local approach to reducing economic inactivity and supporting people back into work

Work and Pensions Secretary Liz Kendall MP announced on 23 July that the Government would enable local leaders to tailor schemes to support people back into “good, rewarding, well-paid” work.

Secretary of State for Work and Pensions Liz Kendall MP: "We need fundamental reform so the department for welfare becomes a genuine department for work.” Photograph: Department for Work and Pensions. 

“Over the last 14 years, millions of people have been denied their rightful chance of participating in the labour market, and the hope of a brighter future,” said Kendall. “We need fundamental reform so the department for welfare becomes a genuine department for work.”

Figures from the Office for National Statistics (ONS) show that the number of working-age people in the UK who are neither employed nor looking for a job has been rising in recent months, with a record 2.8 million people economically inactive due to ill health.

The Government’s announcement of how it plans to tackle the issue came on the back of a report by Barnsley Metropolitan Borough Council on supporting economically inactive people into work. The report calls for a major shake-up of the benefits system and for Government, councils, employers and other agencies to work together to help people get back to work.

The report was carried out by the council’s Pathways to Work Commission, led by former Cabinet Minister Alan Milburn. It recommends a pilot programme which would support 2,200 people into work over a four-year period at a cost of £10 million. Its authors say this would generate £70 million in economic benefits, including a £28 million reduction in benefits payments.

People are economically inactive for a variety of complex reasons, and many will require flexibility and adjustments from employers to help them re-join the workforce, as Sir Steve Houghton CBE, leader of Barnsley Council, explained: “There is no ‘one-size-fits-all’ solution and understanding the variety of barriers with a far more personalised approach is key to tackling the problem.

“As well as supporting individuals, we need to support businesses to change. Many of the people we have met have complex needs and challenges. If they are to work, the ways they are recruited and employed will have to change and be flexible.”

Close work with health partners will also be required, he added, “to ensure those currently in work don’t fall into inactivity if their health becomes an issue”.

British Safety Council chairman Peter McGettrick has welcomed the Government’s plans. He said: “We welcome the plans set out by Liz Kendall, and the new Government’s clear commitment to supporting people not only to return to work, but also to remain in work when they develop long-term health conditions. We know that employees without adequate support at work are less safe, less healthy and less happy, contributing to rising levels of workplace absence, workplace stress and anxiety, and lost productivity.

“We hope that this new approach can indeed mark a needed once-in-generation shift from ‘welfare’ to ‘work’, and we would also like to see two other w’s – ‘worker wellbeing’ – at the heart of all government policy."