Chancellor Rachel Reeves has announced a £240 million investment aimed at addressing the UK’s rising economic inactivity rates, which currently exceed pre-pandemic levels. The funding, unveiled ahead of the upcoming Budget, seeks to enhance support services for those unable to work due to long-term illness or disability.
With 2.8 million people currently out of work owing to long-term sickness, the UK stands alone among G7 nations with higher levels of economic inactivity than before the pandemic. The government’s initiative is expected to drive down these figures by accelerating the rollout of local services tailored to help people return to the workforce.
The new package will bolster the “Get Britain Working” programme, introducing “trailblazers” in various localities that aim to streamline access to work, health, and skills support. These initiatives will be particularly focused on engaging individuals who may not typically connect with existing support systems. By providing tailored early interventions, the government hopes to address the specific barriers that prevent people from seeking employment.
Central to this initiative is the understanding that poor health is a significant contributor to economic inactivity. As such, the government will ensure that work and skills support are more closely integrated with the healthcare system, enabling individuals to receive comprehensive assistance in both health and employment.
Chancellor Reeves stated, “Due to years of economic neglect, the benefits bill is ballooning. We will build a Britain where people who can work, will work, turning the page on the recent rise in economic inactivity and decline towards a future where people have good jobs, and our benefits bill is under control.”
Alongside this new funding, plans are in motion to accelerate benefit reforms, with the aim of transitioning 800,000 individuals from the older Employment and Support Allowance (ESA) to Universal Credit (UC) earlier than scheduled. This change is designed to modernise the benefits system and encourage more people to seek employment.
Work and Pensions Secretary Liz Kendall emphasised the importance of supporting young people, stating that “millions have been denied the opportunity to build a better life.” The Get Britain Working plan aims to ensure that every young person receives the necessary support to pursue either education or employment, with a vision to achieve an ambitious employment rate of 80%.
The government’s overarching strategy focuses on unlocking barriers to employment and enhancing living standards nationwide. By investing in job creation, reforming employment support, and devolving power away from Westminster, officials believe many more people will benefit from the dignity of work.
Shevaun Haviland, Director General of the British Chambers of Commerce, welcomed the announcement, noting the urgent need for action in addressing the skills gap and the challenges faced by employers in filling job vacancies. “Many firms are struggling to fill job vacancies, which is constraining their operations and profitability,” she said.
The government is committed to ensuring that these initiatives are implemented swiftly, allowing firms to cultivate robust workforces capable of driving economic growth in the years to come.
