Pathways to Work: A Blueprint to Transform DWP and Boost UK Employment – Sector Reaction

Liz Kendall, the Work and Pensions Secretary, set out how Britain’s system of employment support must be fundamentally reformed to tackle the “most urgent challenge” of spiralling economic inactivity. She delivered a landmark first speech to outline the Government’s plans to reverse the dire labour market inheritance and drive up Britain’s employment.

In her speech, Kendall:

• Laid out major new reforms at the heart of the Government’s ambition to reach an 80% employment rate.
• Announced a white paper on getting Britain working again.
• Empowered local leaders to tackle economic inactivity.
• Introduced a new Labour Market Advisory Board to help drive change and get Britain working again.

Kendall presented the “Pathways to Work” report in Barnsley, which paved the way for the new Government white paper. She outlined the dire inheritance from the previous 14 years,

Including:

• Britain remaining the only G7 country whose employment rate had not returned to pre-pandemic levels.
• 2.8 million people out of work due to ill health or disability.
• 1 in 8 young people not in education, employment or work.
• Projected £30bn increase in spending on sickness and disability benefits over the next five years.

Kendall argued that the current system of employment support was designed to address yesterday’s problems, not those of today and tomorrow. She criticised the previous government’s approach and called for “employment opportunity unleashed for all” as part of the government’s long-term ambition to reach 80 percent employment.

The Secretary of State announced plans to empower local leaders to tailor schemes to get people back into work, prioritising good, rewarding, well-paid work. She confirmed that local places would be given the responsibility and resources to design a joined-up work, health, and skills offer.

Kendall also announced the formation of a new Labour Market Advisory Board, chaired by Paul Gregg, to provide labour market insight and advice to drive change throughout the system.

The speech followed Kendall’s earlier announcement of a Government White Paper building on manifesto commitments,

Including:

1. A new national jobs and career service.
2. New work, health and skills plans for the economically inactive, led by Mayors and local areas.
3. A youth guarantee for all young people aged 18 to 21.

This formed part of a cross-government approach to help people into work, including the launch of Skills England and efforts to cut NHS waiting lists.

Sector Reaction

Simon Ashworth, AELP Deputy Chief Executive and Director of Policy, Said:

“Britain is the only G7 nation which hasn’t returned to pre-Covid employment rates, so we welcome cross-departmental government work to tackle economic inactivity. In particular, the youth guarantee has to potential to offer the 900,000 young people not in education, employment or training, some hope for the future. However, these plans will need the backing of employers right across the country. By offering relevant work-based learning, Independent Training Providers have excellent relationships with businesses in their local communities so will need to play a crucial role in reversing economic inactivity. We look forward to seeing the detail set out in the government’s white paper in due course.”

John Foster, CBI Chief Policy & Campaigns Officer, said:

“The government is absolutely right to make tackling economic inactivity and boosting personal financial security a key priority. Economic inactivity remains too high and it’s clear that more must be done to unlock the potential of the UK’s workforce. 

“While there are signs that pressures in the labour market are cooling, firms are still struggling to find the staff to power their ambitions – putting a dampener on investment and growth when we need them most. 

“Ensuring a more joined-up approach to tackling economic inactivity that is more locally responsive and which builds-in efforts to tackle long-term ill-health can help unlock the untapped potential within the labour market. Delivering this programme of reform will require close partnership between government and business to enable the meaningful change we all want to see.

“Employers also have a role to play here, with many firms already providing healthcare support to their workers – including preventative measures. By making health support for employees tax free, particularly in areas like Employee Assistance Programmes and early occupational health referrals, we could really ramp up these efforts and make a significant contribution to improving staff wellbeing.” 

David Hughes, Chief Executive, Association of Colleges, said: 

“The proposals that the Department for Work and Pensions has set out today rightly aim to open up economic opportunity and join up skills, employment and health at a local level. As anchor institutions in their local communities, working closely with hundreds of local employers, colleges can play a central role in delivering on these ambitions by providing high-quality, flexible programmes for young people and adults that lead to good jobs. Colleges are keen to partner with employment and health organisations to make this work. We have long called for conditionality around Universal Credit to be reviewed, so are pleased to see DWP focus on the systemic barriers that exacerbate regional inequity by preventing those on sickness benefits or in low-paid jobs from upskilling or retraining to secure better work. This sits well with the approach needed to make the Youth Guarantee a reality for the one in eight young people not in education, employment or training.”