Joe Shalam is the Policy Director at the Centre for Social Justice
Yesterday’s fiscal event had been briefed as the Government’s “back to work Budget”. Thankfully it lived up to that moniker.
But while multibillion-pound rabbits on childcare support hopped into the headlines, new measures announced by the Chancellor to help long-term sick and disabled people into work are, I believe, much more significant.
Done well, they represent the single most important welfare reform since the introduction of Universal Credit almost a decade ago.
The backdrop to this, of course, is the alarming rise in economic inactivity we have seen since the pandemic. Today there are some nine million people outside of the labour force, up by almost half a million since 2020. While there are now, in fact, fewer people inactive due to early retirement than pre-pandemic, the real driver has been long-term sickness, where we’ve seen a 16 per cent increase since Covid reached our shores.
This has translated into an explosion in working-age welfare. Data from the Department of Work and Pensions (DWP) analysed by the Centre for Social Justice (CSJ) suggests that there are some 1.6 million more claimants since 2020, costing the state around £13 billion more in welfare benefits.
Looking more closely at the data, it becomes clearer that the fastest-growing category of claimants is now those with “No Work Requirements”, totalling some 3.5 million today.
Almost two out of three of these are individuals out of work due to long-term sickness and disability. They have been signed off after an assessment due to caring responsibilities, physical and, increasingly, mental health conditions. Given their circumstances, they are exempt from welfare rules designed to help or encourage people into work.
As a result of their conditions, many people in this category may never be able to work. They should be treated with compassion and support. But CSJ analysis of official survey data shows that a very large number – at least 700,000 – say that they would like to work, with even more saying they could with the right support.
To put this in context, that represents more than half of all vacancies currently in the economy. A statistic the Chancellor is all too aware of since he mentioned it in his statement yesterday.
Marking a significant shift in the political landscape, it is now a position shared by both Labour and the Conservatives that rather than reaching for the easy lever of immigration, we should instead focus on unlocking the huge potential of this group in order to fire up the economy, cut the benefits bill, and transform thousands of lives
So how should we do this? Thankfully, we know how to help this hidden army into work.
By matching claimants with local jobs, and then providing highly personalised support across health, housing, personal finances, and so on, we see individuals not only move into but thrive in work.
It has been shown to work at the local level via Greater Manchester’s “Working Well” programme, which has seen 42 per cent of participants move into work after just over a year, compared to just 25 percent of those on the wider Work and Health Programme after two years. Only two per cent drift into work without the same help.
This is why the CSJ has been campaigning for more than a decade to see Universal Support rolled out nationally. It was always meant to sit alongside Universal Credit, specifically focusing on this written-off group. But it was cut by an impecunious Treasury.
Today’s announcement – of a new £925 million Universal Support programme, helping 50,000 people with disabilities and long-term sickness into work every year – is therefore a major step forward.
But the devil will be in the detail. We know from years spent working with those turning around lives at the grassroots level that it is the small charities, based in communities, who are best placed to help those facing the biggest barriers to progress.
The WorkWell pilots also announced today must therefore work symbiotically with Universal Support, ensuring people are getting the right help they need and breaking free of central government’s fear of the small charity sector.
Mel Stride, the Work and Pensions Secretary, also deserves credit for his bold reforms to disability benefits admittedly subsumed by yesterday’s more eye-catching announcements. Removing the Work Capability Assessment (WCA) entirely will help to remove the considerable financial penalties people with disabilities currently experience upon moving into work, and will incentivise the system to focus more on what people can do rather than what they cannot.
Still, this will take years to implement. By the late 2020s (at the earliest). This is not a reason not to do it. And it is right that time is taken to ensure highly vulnerable people are protected during the transition to the new assessment model.
But the Government must explore ways to move more quickly and address the profound worry many people on sickness benefits experience about the risks of dipping their toe in employment, or even of engaging with the welfare system.
DWP data shows that more than half of claimants with No Work Requirements who want to work are worried about losing the additional benefits they receive. Many think that “the system” is out to get them. We must change this if we are to succeed.
And so in its next move, the Government should announce an “Into Work Guarantee”, providing a cast iron assurance that sickness benefit claimants trying employment can move back onto the additional benefits they were receiving if the job doesn’t work out in a set period.
In the interim this would be a powerful signal that the Government is there to help those who want to try work, requiring only secondary legislation and therefore much more expeditious than the mammoth bill needed to overhaul WCAs.
Moreover, it will help to improve the take up of the new Universal Support offer, which has been rightly flagged by Paul Johnson, of the Institute for Fiscal Studies, as one of the key challenges the Government faces across the range of measures introduced to help people into work, however well-intentioned.
For years, a rising number have fallen through the cracks in the welfare system and been left to languish. In gripping the nettle of economic inactivity, and recognising that, with the right support, thousands more people can be helped to gain the social, financial, and health benefits of work, ministers deserve credit for seeking to complete the unfinished business of welfare reform.
Joe Shalam is the Policy Director at the Centre for Social Justice
Yesterday’s fiscal event had been briefed as the Government’s “back to work Budget”. Thankfully it lived up to that moniker.
But while multibillion-pound rabbits on childcare support hopped into the headlines, new measures announced by the Chancellor to help long-term sick and disabled people into work are, I believe, much more significant.
Done well, they represent the single most important welfare reform since the introduction of Universal Credit almost a decade ago.
The backdrop to this, of course, is the alarming rise in economic inactivity we have seen since the pandemic. Today there are some nine million people outside of the labour force, up by almost half a million since 2020. While there are now, in fact, fewer people inactive due to early retirement than pre-pandemic, the real driver has been long-term sickness, where we’ve seen a 16 per cent increase since Covid reached our shores.
This has translated into an explosion in working-age welfare. Data from the Department of Work and Pensions (DWP) analysed by the Centre for Social Justice (CSJ) suggests that there are some 1.6 million more claimants since 2020, costing the state around £13 billion more in welfare benefits.
Looking more closely at the data, it becomes clearer that the fastest-growing category of claimants is now those with “No Work Requirements”, totalling some 3.5 million today.
Almost two out of three of these are individuals out of work due to long-term sickness and disability. They have been signed off after an assessment due to caring responsibilities, physical and, increasingly, mental health conditions. Given their circumstances, they are exempt from welfare rules designed to help or encourage people into work.
As a result of their conditions, many people in this category may never be able to work. They should be treated with compassion and support. But CSJ analysis of official survey data shows that a very large number – at least 700,000 – say that they would like to work, with even more saying they could with the right support.
To put this in context, that represents more than half of all vacancies currently in the economy. A statistic the Chancellor is all too aware of since he mentioned it in his statement yesterday.
Marking a significant shift in the political landscape, it is now a position shared by both Labour and the Conservatives that rather than reaching for the easy lever of immigration, we should instead focus on unlocking the huge potential of this group in order to fire up the economy, cut the benefits bill, and transform thousands of lives
So how should we do this? Thankfully, we know how to help this hidden army into work.
By matching claimants with local jobs, and then providing highly personalised support across health, housing, personal finances, and so on, we see individuals not only move into but thrive in work.
It has been shown to work at the local level via Greater Manchester’s “Working Well” programme, which has seen 42 per cent of participants move into work after just over a year, compared to just 25 percent of those on the wider Work and Health Programme after two years. Only two per cent drift into work without the same help.
This is why the CSJ has been campaigning for more than a decade to see Universal Support rolled out nationally. It was always meant to sit alongside Universal Credit, specifically focusing on this written-off group. But it was cut by an impecunious Treasury.
Today’s announcement – of a new £925 million Universal Support programme, helping 50,000 people with disabilities and long-term sickness into work every year – is therefore a major step forward.
But the devil will be in the detail. We know from years spent working with those turning around lives at the grassroots level that it is the small charities, based in communities, who are best placed to help those facing the biggest barriers to progress.
The WorkWell pilots also announced today must therefore work symbiotically with Universal Support, ensuring people are getting the right help they need and breaking free of central government’s fear of the small charity sector.
Mel Stride, the Work and Pensions Secretary, also deserves credit for his bold reforms to disability benefits admittedly subsumed by yesterday’s more eye-catching announcements. Removing the Work Capability Assessment (WCA) entirely will help to remove the considerable financial penalties people with disabilities currently experience upon moving into work, and will incentivise the system to focus more on what people can do rather than what they cannot.
Still, this will take years to implement. By the late 2020s (at the earliest). This is not a reason not to do it. And it is right that time is taken to ensure highly vulnerable people are protected during the transition to the new assessment model.
But the Government must explore ways to move more quickly and address the profound worry many people on sickness benefits experience about the risks of dipping their toe in employment, or even of engaging with the welfare system.
DWP data shows that more than half of claimants with No Work Requirements who want to work are worried about losing the additional benefits they receive. Many think that “the system” is out to get them. We must change this if we are to succeed.
And so in its next move, the Government should announce an “Into Work Guarantee”, providing a cast iron assurance that sickness benefit claimants trying employment can move back onto the additional benefits they were receiving if the job doesn’t work out in a set period.
In the interim this would be a powerful signal that the Government is there to help those who want to try work, requiring only secondary legislation and therefore much more expeditious than the mammoth bill needed to overhaul WCAs.
Moreover, it will help to improve the take up of the new Universal Support offer, which has been rightly flagged by Paul Johnson, of the Institute for Fiscal Studies, as one of the key challenges the Government faces across the range of measures introduced to help people into work, however well-intentioned.
For years, a rising number have fallen through the cracks in the welfare system and been left to languish. In gripping the nettle of economic inactivity, and recognising that, with the right support, thousands more people can be helped to gain the social, financial, and health benefits of work, ministers deserve credit for seeking to complete the unfinished business of welfare reform.