Government Unveils £1 Billion Welfare Reform to Boost Employment
The UK government has announced the most significant welfare reform in decades, aiming to help disabled and long-term sick individuals into work while ensuring financial sustainability for those who need support. The plan includes scrapping the Work Capability Assessment, introducing a “right to try” work guarantee, and investing £1 billion in tailored employment support.
Transforming the Welfare System
The new welfare strategy, unveiled by Work and Pensions Secretary Liz Kendall, seeks to address the growing number of people out of work due to long-term illness. The number of working-age individuals receiving Personal Independence Payments (PIP) has more than doubled since the pandemic, reaching unsustainable levels. If no action is taken, PIP claims could rise from 2 million in 2021 to 4.3 million in five years, costing £34.1 billion annually.
Under the reforms, the Work Capability Assessment will be abolished, ending a system that critics say has discouraged people from attempting work. Instead, a single assessment based on the existing PIP evaluation will be introduced, ensuring financial support reflects a person’s actual needs rather than simply their work capacity.
Key Reforms to Support Employment
To help more people enter the workforce, the government is launching one of the most significant employment support programmes in UK history, backed by £1 billion. New measures include:
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Tailored Support Conversations: Providing personalised employment guidance to those on health and disability benefits.
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Youth Guarantee: Delaying access to the health element of Universal Credit until age 22, with savings reinvested in training and work support for young people.
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Access to Work Scheme Reforms: Updating support for reasonable adjustments, assistive technology, and workplace accessibility.
Additionally, individuals on incapacity benefits who have the potential to work will face reassessments to ensure they receive appropriate support rather than being indefinitely written off.
Protecting the Most Vulnerable
While these reforms aim to boost employment, the government insists on maintaining support for those who cannot work. Key protections include:
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Ending Reassessments for Severe Conditions: Individuals with lifelong or severe disabilities will no longer face repeated evaluations.
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New Severe Disability Premium: Additional financial support for those with significant, permanent health conditions.
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Standard Allowance Increase: Raising the Universal Credit standard allowance above inflation by 2029/30, adding £775 annually in cash terms.
A Financially Sustainable Future
The welfare budget is projected to reach £70 billion per year by the end of the decade—equivalent to a third of the NHS budget. To ensure long-term sustainability, the government plans to rebalance welfare payments and introduce new eligibility criteria for PIP, targeting support at those with the greatest need.
A Commitment to Change
Prime Minister Keir Starmer stated, “We inherited a fundamentally broken welfare system. While we will always protect the most vulnerable, we must also ensure that those who can work do work. This reform will improve lives, drive economic growth, and create opportunity for all.”
These welfare changes mark a turning point in the UK’s approach to social security. By investing in employment support, removing systemic barriers, and ensuring financial sustainability, the government aims to create a fairer and more effective welfare system for future generations.