DWP Needs to Focus on Employment, Not Welfare, Says Minister

Liz Kendall leaving 10 Downing Street after being appointed Work and Pensions Secretary, in London, England, on July 5, 2024. Lucy North/PA Wire

The Department for Work and Pensions (DWP) will be transformed from a “department for welfare” into a “department for work,” the secretary of state for work and pensions has said.

Liz Kendall set out on Tuesday the government’s ambition to reform the department, including a fundamental overhaul of Jobcentre Plus whereby it will be transformed into a new jobs and career service, formed by partnering it with the National Career Service.

The DWP will also establish a “youth guarantee” for all those aged 18 to 21, which will offer training and apprenticeships and help young people find work. The plans come as one in eight young people are not in education, employment, or work, according to a government press release.

The final reform is to devolve new powers of employment support to local leaders, which Ms. Kendall said was key to enabling areas to develop local growth plans.

“We will give local places the responsibility and resources to design a joined up health, work, and skills offer that’s right for local people,” she said at the launch of the “Pathways to Work” report in Barnsley, South Yorkshire.

Ms. Kendall also announced plans for a Labour Market Advisory Board, a panel of external experts who will provide labour market insights and advice.

The plans were revealed after Prime Minister Sir Keir Starmer announced on Monday the formation of Skills England, a new body to deal with the country’s “fragmented and broken” skills training system.

Goal to Increase Employment to 80 Percent

The reforms to Ms. Kendall’s department come as part of the new government’s goal of increasing the employment rate to 80 percent of working-aged people, which would mean adding more than two million people to the workforce.

The employment minister said the changes were needed because under the previous Conservative governments over the past 14 years, DWP had focused more on welfare than work.

She said: “They turned Jobcentre Plus into a benefit monitoring service, not a public employment service, which was its original aim. They paid nowhere near enough attention to the wider issues like health, skills, childcare, transport that plays such a huge role in determining whether you get work, stay in work, and get on in your work.

“The result is a system that is both too siloed and too centralised. We fail to properly join up health work and skills, and we aren’t rooted in local economies and driven by local needs.”

“The DWP will shift from being a department for welfare, to being a department for work,” she said.

The minister confirmed that jobseekers’ obligations to engage with support, look for employment, and take jobs when offered will continue.

9.4 Million People Economically Inactive

The work and pensions secretary announced the plans amid spiralling economic inactivity and a rising number of people off work with long-term illness.

The Office for Budget Responsibility said that spending on sickness and disability is set to increase by £30 billion over the next five years.

Latest Office for National Statistics (ONS) figures reveal that people classed as economically inactive—those aged 16 to 64 who are unemployed and not looking for work—had reached 9.4 million people, or 22.1 percent of the working-aged population.

While the figure is down slightly on measurements released in June, it is higher than estimates.

The ONS says that since record-keeping on economic inactivity began in 1971, the rate had generally been falling.

“However, it increased during the coronavirus (COVID-19) pandemic and fluctuated around this increased rate,” the statistics agency said.

The UK is the only G7 nation whose employment rates have not recovered to its pre-lockdown levels.

2.8 Million Out of Work Because of Long-Term Sickness or Disability

According to the DWP, the UK also has a near-record 2.8 million people out of work due to long-term sickness or disability.

The previous Conservative government had sought to tackle rising work absenteeism by proposing a service that combined workplace advice and health support to assist those with long-term conditions to get into and stay in employment, with former Employment Minister Mel Stride saying it would help end the “spiral of sickness.”

The Conservatives had also vowed to review the Personal Independence Payments system, which provide allowances for people with disabilities who struggle with everyday activities.

The Conservatives’ proposed measures had prompted criticism from charities who called the plans an assault on disabled people.

However, the then-government had said that the current system was not financially sustainable, with the Resolution Foundation think tank also warning that the Universal Credit system would need to be changed because it was not built to deal with such a rise in long-term sickness and disability.