Local services to “get Britain working” will get a £240 million funding boost in the Budget, the Prime Minister has said.
The Government will seek to “tackle the root causes of economic inactivity”, Sir Keir Starmer said in a speech ahead of Chancellor Rachel Reeves’ first financial statement on Wednesday.
The funding will partly go towards rolling out a scheme of so-called trailblazers in local areas who will focus on reaching people not usually in touch with the system, according to the Treasury.
The plan to pull the employment rate up to 80% is part of the Government’s mission for growth.
Sir Keir said: “Rebuilding Britain and delivering growth will take the skills and effort of all of us.
“That’s why this Budget will also get Britain working.
“It will pave the way for reforms that tackle the root causes for economic inactivity and make sure that those who can work do work.
“As a Labour Government, we will always help those who cannot support themselves, but the UK is the only G7 country for whom inactivity is still higher than it was before Covid.
“And that’s not just bad for our economy, it’s also bad for all those who are locked out of opportunity.
“So the Chancellor will announce £240 million in funding to provide local services that can help people back into work and the dignity that that brings.”
Labour had previously promised reforms to help the “lockdown generation” get back into employment, and ministers expected to publish a Get Britain Working White Paper this autumn.
Those reforms aim to marry an approach of high expectation and high support, with the expectation that those who can work should do so but that they should also be properly supported with real opportunities to get a decent job.
Some 2.8 million people are out of work due to long-term sickness.
When Liz Kendall took over as Work and Pensions Secretary after the July election, she said Labour’s goal to reach an 80% employment rate would mean getting two million more people back into work.
She also said powers and resources would be transferred to mayors and local areas to lead work, health and skills plans for the economically inactive.
The Government will work closely with mayors on the trailblazers scheme.
The trailblazers will be tasked with bringing together and streamlining work, health, and skills support for disabled people and those who are long-term sick.
Some 800,000 people will also be moved on to universal credit from the old employment and support allowance from this autumn, instead of 2028, with the aim of getting them more access to support to find and start work.
Ms Reeves said: “Due to years of economic neglect, the benefits bill is ballooning.
“We will build a Britain where people who can work will work, turning the page on the recent rise in economic inactivity and decline and towards a future where people have good jobs and our benefits bill is under control.”
Ms Kendall said: “Millions of people have been denied the opportunity to build a better life.
“This includes one in eight young people who have had their hopes of a brighter future dashed and written off before they’ve even begun.
“Through our Get Britain Working plan, we will ensure every young person is supported to find earnings or learning, while our new jobs and careers service will transform opportunity for all, as we deliver the fundamental reforms needed to tackle spiralling inactivity, grow the economy, and take our first steps to our ambitious 80% employment rate.”
Economic inactivity has soared by 900,000 to 2.8 million people since before Covid in 2020, with 85% of this due to those who are long-term sick, according to a report from the BCG Centre for Growth and the NHS Confederation published in September.
