Almost a quarter of the working age population in the UK, 11 million people, are unemployed. Only 1.5 million of this group is actively looking for work.
While some of these figures relate to individuals taking early retirement or taking a break from working to further their education or care for loved ones, the primary concern relates to roughly 2.8 million people who are out of work or absent from work on long-term sickness, a figure that has climbed significantly since the Covid-19 pandemic.
When the Labour Government came into power in 2024, it announced its intentions to tackle the issue of unemployment in the UK. The ‘Get Britain Working’ White Paper aimed to reduce economic inactivity, promote higher employment, and to help individuals develop and enhance their skills, providing access to better jobs. Its goal was to achieve a national employment rate of 80% (up from 75%), translating to more than 2 million people joining the workforce.
Schemes for supporting this intention included:
- A £55 million proposal to merge the National Careers Service with Job Centres to create a ‘National Jobs and Careers Service’ which, beyond managing benefits, would provide tailored careers advice and support for the long-term unemployed to return to work;
- £125 million of funding to 8 ‘trailblazer’ NHS accelerators in specified regions that would integrate healthcare and employment support to help sick and disabled individuals return to work;
- The Youth Guarantee scheme, created for young people aged 18 to 21, to offer job assistance, training and apprenticeships, with potential sanctions if they are not taken up; and
- An independent review that would look at the role of Employers in implementing healthy and inclusive workplaces, and how the Government could better support them in achieving that. This is to help tackle the impact that poor overall health can have in the workplace, such as sickness absence and staff turnover. It will also examine what steps Employers can take to increase recruitment and improve retention of people with disabilities, such as making reasonable adjustments and flexible working practices. The review will seek input from Employers, Employees, trade unions and health professionals.
Complexities
There are some complexities facing the ‘Get Britain Working’ initiative, however.
It is widely agreed that highly tailored and continued support is vital for supporting individuals in getting back into employment, especially in those groups that are termed as economically inactive, so many welcome the intentions of the initiative.
However, the recent increase to Employers’ National Insurance Contributions, and the rise in the National Minimum Wage, combined with the Government’s planned overhaul of the health and disability benefits system, which will include £3 billion in welfare cuts, is expected to create some barriers to achieving its goal of getting the population back into work.
Let’s look at three areas of concern.
Effects on Long-Term Sick and Disabled Individuals
For individuals not currently part of the labour market, due to disabilities and long-term illness, it is important that the proposed Government reforms provide them with confidence in their pathways back into employment.
It is felt that the reforms need to be flexible and supportive enough to ensure that individuals can return to work without it being at the cost of their well-being. With the promise of welfare cuts causing concern to many individuals, several charities and disability rights groups are highlighting the importance of avoiding pressuring sick and disabled individuals into any available jobs, which may not be suited to them, and could potentially worsen their health or existing conditions.
Furthermore, the reforms should be of a nature that individuals shouldn’t fear the possibility of losing their welfare entitlements should they return to work and realise that they cannot cope or keep up with the demands of the role.
The Youth Guarantee Initiative
The Youth Guarantee initiative will ensure every young person aged 18 to 21 has access to education, apprenticeships or training, and they have a responsibility to take it up, or face losing access to benefits. While providing support to young people to get into work is vital (as being out of work at a young age can have negative effects and make it harder to enter into employment in the future), there have been concerns raised about the ‘conditional’ nature of the initiative, in that it could force some young people into any job that they can get, for fear of losing their benefits. It is felt that many may not realise their full potential this way, and that it could even negatively impact them mentally.
Availability of Jobs
Many Employers have cited serious concerns regarding their ability to hire and retain staff in the face of the recent increase to the National Minimum Wage and Employer’s National Insurance Contributions.
The increases have made running a business with staff more expensive, with many organisations announcing that they plan to cut back on recruitment, or to initiate hiring freezes, reduced pay or even redundancies. As a result, it is felt that this could potentially lead to there being fewer jobs available for 2 million unemployed individuals to take up, defeating the purpose of the Government’s intentions of getting people back to work.
Conclusion
While the intentions of the ‘Get Britain Working’ initiative are widely welcomed, other activities encircling it have drawn a mixture of concern, and some scepticism as to how well it will tackle the challenges that will inevitably arise.
Although this blog mainly focuses on the Government’s activities, it aims to serve as a ‘heads up’ to Employers as to what they can expect, and what will be expected of them, over the coming months.
There will be challenges for businesses with regards to the rate increases – please refer to our January 2025 blog post on what businesses are doing, and what more they can do, to manage and reduce this financial burden as much as possible.
However, when it comes to supporting a return to work for unemployed individuals, Employers shouldn’t wait for Government instructions – they should be investing time and money, to create healthy and inclusive practices and workplaces for Employees and potential candidates, regardless of their statuses.
Do you have any questions on this topic, or queries as to how you can enhance your own workplace to be healthier and more inclusive? If so, please do not hesitate to give us a call.