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The government is promising major reforms to reduce welfare bills by putting more people into work.
He unveiled plans called 'Get Britain Working' which include a £240m investment to overhaul the current network of job centers across Britain, as well as increased funding for mental health services .
Prime Minister Sir Keir Starmer said the reforms would tackle the “key drivers of unemployment and inactivity”.
However, many crucial details of what the reforms will mean in practice have not been confirmed, and it is understood that such decisions will not be made until next year.
For example, the government has said young people must accept offers of employment or training or risk losing their social benefits, but it has not specified how these sanctions would work or when they would come into effect.
The government has pledged to increase the employment rate to 80% from its current level of around 75%, which would mean around two million more people in work.
“We are renovating employment agencies to adapt them to the modern era. We are giving young people the skills and opportunities they need to prepare them for the jobs of tomorrow,” said Sir Keir.
The Prime Minister added that the Government's reforms would “end the culture of blaming and shaming people who for too long have not received the support they need to return to work”.
On Tuesday, Work and Pensions Secretary Liz Kendall will announce funds to provide additional capacity to reduce waiting lists in the 20 NHS trusts with the highest levels of economic inactivity, with the aim of allow more people currently on sick leave to return to work.
She will also announce plans to expand support for mental health and efforts to combat obesity.
In other measures to be revealed:
The job centers will be renamed the National Jobs and Careers Service. Every young person aged 18 to 21 in England will have access to apprenticeship, training or education opportunities or help to find work under a new Youth Guarantee scheme. independent review of what UK employers are doing to promote health and inclusive workplaces. The North East, South Yorkshire and West Yorkshire will receive more money to stop people losing their jobs due to ill health.
The Government sees its employment reforms as a key step in achieving its main objective of growing the UK economy to create more jobs and improve living standards.
But he also doesn't want to be seen as a “soft take” by some when it comes to welfare benefits. Getting more people to work and equipping young people with skills is seen as key to boosting productivity and generating growth.
However, the Conservatives said the government's latest announcement showed Labor was “unprepared to make the difficult but necessary choices to bring down the benefits bill”.
“They have even dodged tough decisions on sickness benefits, which are necessary to make the welfare system sustainable in the long term,” said Helen Whately, shadow secretary of state for work and pensions.
Between 2024 and 2025, the government says it will spend £137.4 billion on “working age and children” social care. This includes spending on benefits such as Universal Credit. In comparison, the UK plans to spend £137.5 billion on state pensions over the same period.
As unemployment stands at nearly 1.5 million, the number of people considered economically inactive – unemployed or actively seeking work – has jumped to more than nine million. It increased during Covid, but has remained consistently high since.
The pandemic has also contributed to 2.8 million people not working due to long-term illness.
But the tax increases announced in the budget sparked a backlash from businesses who warned the policy decisions would make it harder for employers to hire more people.
On Monday, Chancellor Rachel Reeves defended her decision to increase national insurance for employers. She said that despite “a lot of feedback” on her tax and spending plans, she hasn't heard many alternatives.
Gary Wroe
Gary Wroe
However, Gary Wroe, managing director of Hockley Mint, a Birmingham jewelery manufacturer, said the budget had “hampered” the company’s “growth opportunities”.
They employ 98 people and take on a number of apprentices each year, but Mr Wroe said the company would struggle to continue recruiting apprentices given the rise in National Insurance.
Hockley Mint
Abi
One of her current apprentices, Abi, 17, said she knew people who had left school but couldn't find work.
“I think a lot of it is due to the lockdown. I think it's because people have been sitting in the house and not doing anything,” she added.
The government's plans were welcomed by the Chartered Institute for Personal Development, whose chief executive Peter Cheese said they were “a step in the right direction” but called for “more ambition” to ” making apprenticeships a viable alternative to university.
But Catherine Parsons, who oversees Big Issue's specialist employability service, Big Issue Recruit, said “scare tactics” would only exacerbate Britain's labor shortage.
“We know that the sharp increase in anxiety and mental health problems among young people has had a direct impact on their ability to find and keep good jobs,” she added.
“The new looming threat of having their benefits withdrawn if they fail to muster the mental strength to take up work or training will only perpetuate the vicious cycle of failure that has seen economic inactivity and the bill social crisis has spiraled out of control in recent years.”
