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UK Chancellor Jeremy Hunt plans to spend an extra £2.5 billion on job support for people with long-term illness and unemployment as part of a wider push to cut welfare bills and boost the workforce.
On Thursday, Treasury said next Wednesday’s autumn statement will include a back-to-work plan to help people with mental and physical health conditions find and keep work.
The Chancellor said the combination of carrot and stick would help both businesses and individuals to stimulate the economy at the same time, and presented the changes as the biggest reform of the welfare system since the introduction of the flagship universal credit system in 2010.
Hunt has prioritized curbing the rising costs of disability benefits and tackling the post-pandemic rise in people out of work with long-term illnesses, which has worsened labor shortages.
The package will include an expansion of the NHS Talking Therapies service for people suffering from anxiety and depression; supporting the employment of an additional 100,000 people with serious mental illness; and strengthening the universal support program to help those who have the greatest difficulties entering the labor market.
Ministers said they would also extend the Restart program introduced in 2020 to help the long-term unemployed, while tightening sanctions on those who did not look for work or did not agree to compulsory work or traineeship after 18 months of support.
Hunt said anyone who decides to rely on taxpayers’ hard work will lose their benefits. Hammering home a message popular with Conservative backbenchers, Mel Stride, the secretary of state for work and pensions, said: If you are fit, if you refuse to work, if you are taking the taxpayer for a ride, we will take your benefits.
The government is expected to unveil restrictions on sickness benefits alongside Hunt’s autumn statement in which he will outline changes to the work capacity assessment, a test used to identify people who are eligible for more generous benefits and are not expected to be looking for work .
Spending on disability benefits has skyrocketed from PLN 15.9 billion in 2013-14 to PLN 25.9 billion this year, and more than 2.3 million people are now eligible for support.
In September, ministers consulted on plans to tighten the system, arguing that adopting flexible working after Covid-19 would allow many sick and disabled people to work from home.
But charities fear the changes could cause serious hardship without increasing staffing, as jobs that can be done remotely are rarely available to benefit claimants.
The extension to employment support announced on Thursday will help Hunt argue that the support available is sufficient for those who are able to opt out of benefits.
But policy experts said that while increasing support is welcome, it is unhelpful to link it, even rhetorically, to a sanctions system that punishes people for often minor violations.
Tony Wilson, director of the Institute of Employment Studies’ think tank, said mental health services needed to be urgently strengthened and the Restart program had been effective in helping the long-term unemployed.
But combining this help with a tough-on-fraud message would discourage people and lead to government employment services being seen as a hostile environment, he argued.
Plans to support people with health problems can make a real difference, but the focus should be on enabling them to get the jobs they want to do, said Alex Veitch, director of policy at the British Chambers of Commerce.
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