Rise in long-term sickness and disability threatens back to work plan

More than half a million jobless youngsters are not even looking for work
Economic inactivity is “defining challenge” for government, warns think tank
More than half of young NEETs could miss out on Labour’s back to work pledge

The Labour Government will never reach its employment target without “significant progress” on economic inactivity, according to a new report.

Mind the Disability Employment Gap, a new report from the Centre for Social Justice (CSJ), warns that economic inactivity is a “defining challenge” for the new government. It points to the number of people out of work due to disabilities or health conditions and claiming health-related benefits only continuing to rise.

The report highlights how almost a quarter of working age adults are now reporting a disability or significant impairment due to a health problem. More than half of young people, 16-24 year olds, who are not in education, employment or training (NEETs), are economically inactive – amounting to over half a million people (552,000). The number of inactive 16-24 year olds has risen by over 50 per cent in just three years.

Previous CSJ research has found that that unless action is taken to reverse the tide of people quitting the labour market for health reasons, the taxpayer will face a colossal £12 billion hole in the public finances in five years time – of which up to £1.5 billion is made up of lost tax receipts.

The new report calls on the new government to “ensure that the needs of disabled and sick people and the barriers they face in the world of work are at the heart of their plans to ‘get Britain working’.”

It singles out the ‘disability employment gap’, the difference in the employment rate between disabled people and those who are not. Between July and September of this year, this stood at close to 30 per cent (27.5 per cent), with barely half of disabled adults (54.4 per cent) in employment.

The CSJ criticises how government efforts have been “slow or insufficiently ambitious” in recent times but recognises the opportunity of the upcoming White Paper to revamp plans to reform employment support.

They point to the latest delays to the rollout of Universal Support, pointing out how it could help 100,000 people back into employment every year and yet, the new Labour Government decided to delay the start until Spring 2025.

This comes as Liz Kendall, the Secretary of State for Work and Pensions, has said “we will not allow young people not to be in education, employment or training”, with Labour plans expected to include tougher benefit rules for young people not taking up training or education. Yet, the CSJ warn that this can only apply to unemployed young people, not the economically inactive – which make up the overwhelming majority of NEETs.

There are nearly a million (946,000) 16-24 year old NEETs. Of these, more than half (552,000) are economically inactive, meaning they are not currently searching for work, mostly due to ill-health or disability.

The CSJ say any plans must include specialist employment support and training opportunities for those with a disability or health problem, alongside policies to improve support for sick and disabled people from employers.

James Heywood, CSJ Head of Debt & Financial Inclusion, said:

“The Government must commit to tackling economic inactivity, especially among young people. Without supporting people back into the labour market, its ambitious employment targets are simply unachievable. 

“The rising tide of long-term inactivity will cost the country billions of pounds if left unstemmed. 

“It must start by ending the delays to Universal Support and truly starting the fight against the disability employment gap.”