Biggest employment reforms in a generation unveiled

It comes as stark figures show almost one and a half million people are unemployed, over nine million people are inactive, a record 2.8 million people are out of work due to long-term sickness. Young people have also been left behind with one in eight young people not in education, employment or training, and nine million adults lack the essential skills they need to get on in work.

The UK is also the only major economy that has seen its employment rate fall over the last five years, which has been largely driven by a significant rise in the number of people out of work due to long-term ill health with an outdated employment support system which is ill equipped to respond to this growing challenge.

This White Paper sets out a fundamentally different approach to the employment support system - backed by £240 million of investment - to target and tackle the root causes of unemployment and inactivity, and better join up health skills and employment support based on the unique needs of local communities.  

That includes tackling ill health as the biggest driver of inactivity by fixing the NHS. This includes deploying extra staff to cut waiting lists in areas of high inactivity, expanding access to mental health support, as well as a greater focus on prevention to stop people becoming ill in the first place.

The outdated Jobcentre system will also be transformed into a new national jobs and careers service, focused on people’s skills and careers instead of just monitoring and managing benefit claims. Mayors and councils will be empowered to join up local work, health and skills support in ways that meet the specific needs of their local areas.

The government is also delivering a new Youth Guarantee so every young person has access to education or training to help them find a job and transforming the Apprenticeship Levy in England into a more flexible Growth and Skills Levy backed by £40 million to expand opportunities for young people to develop skills and get into work.

An independent review will also be launched into how employers can be better supported to employ people with disabilities health conditions, and to keep them in the workplace, ensuring that more people can benefit from a sense of dignity, purpose and financial independence.

Building on these reforms, the government will bring forward measures to overhaul the health and disability benefits system so it better supports people to enter and remain in work and to tackle the spiralling benefits bill. A consultation will be published in Spring as part of a commitment to put the views and voices of disabled people at the heart of any policy changes that directly affect them.

The driving purpose behind this new approach is to enable everyone to have the opportunity of secure, rewarding and fulfilling work. Today’s White Paper delivers the fundamental reforms needed to fix the foundations, break down barriers to opportunity particularly for young people and improve living standards.

Prime Minister Keir Starmer said, "From the broken NHS, flatlining economy, and the millions of people left unemployed and trapped in an inactivity spiral – this government inherited a country that simply isn’t working. But today we’ve set out a plan to fix this. A plan that tackles the biggest drivers of unemployment and inactivity and gives young people their future back through real, meaningful change instead of empty rhetoric and sticking plaster politics.

"We’re overhauling jobcentres to make them fit for the modern age. We’re giving young people the skills and opportunities they need to prepare them for the jobs of the future. We’re fixing the NHS so people get the treatment and mental health support they desperately need to be able to get back to work. We’re working with businesses and employers to better support people with disabilities and health conditions to stay and progress in work, and it doesn’t stop there.

"Our reforms put an end to the culture of blaming and shaming people who for too long haven’t been getting the support they need to get back to work. Helping people into decent, well-paid jobs and giving our children and young people the best start in life - that’s our plan to put more money in people’s pockets, unlock growth and make people better off."

The Secretary of State, Liz Kendall MP said, "The Get Britain Working White Paper shows that this Government stands unashamedly for work. We will make sure everyone, regardless of their background, age, ethnicity, health, disability or postcode can benefit from the dignity and purpose work can bring.

"We can build a healthier, wealthier nation – driving up employment and opportunity, skills and productivity – while driving down the benefit bill."

The employment reforms will be underlined by the principle that people who can work, will be expected to work with clear consequences if they don’t properly engage with the government’s employment support offer. The fundamental principles of reform set out in the white paper include:

Fixing the NHS and Tackling economic inactivity caused by ill health

A quarter of all people aged 16-64 have a long-term health condition that limits their day-to-day activities with disabled people nearly three times more likely (than non-disabled people) to be economically inactive. Given the strong evidence on the health benefits of good work, extra capacity will be deployed to reduce waiting lists in 20 NHS Trusts across England with the highest levels of economic inactivity.

The government is providing an additional £22.6 billion of resource spending in 2025-26 for the Department of Health and Social Care. This will support the NHS in England to deliver an additional 40,000 elective appointments a week and make progress towards the commitment that patients should expect to wait no longer than 18 weeks from referral to consultant-led treatment.

The Government will deliver an additional 8,500 new mental health staff and also expand access to Individual Placement and Support (IPS) for severe mental illness, reaching 140,000 more people by 2028/29. On top of this, the Government will take a prevention first approach through an expansion of Talking Therapies, a landmark Tobacco and Vapes Bill and a range of steps to tackle obesity.

The White Paper sets out how the Government will invest £125 million in eight areas across England and Wales, to mobilise local work, health and skills support – so everyone who wants to work can get the joined-up support they need. This includes funding in three of the trailblazer areas for NHS accelerators to stop people falling out of work completely due to ill health. The three areas will be the North East, South Yorkshire and West Yorkshire.

These eight trailblazers will be at the forefront of designing how locally joined-up support will work in practice across England and Wales.