Getting the long term unemployed back into work will transform the economy, says Government adviser

The rising costs of welfare and the country’s increasing dependency on immigration have become significant concerns, prompting a call for reform from a prominent government health adviser. Alan Milburn, a former health secretary, has emphasised the need for individuals with long-term illnesses and others stuck in a cycle of long term unemployment to actively seek employment. He argues that this approach is essential to address the unsustainable welfare costs associated with the long term unemployed and to mitigate the “toxic” reliance on immigration for the workforce.

Milburn claims that a significant majority, about seven out of ten, of those categorized as economically inactive have a desire to work. However, the current system offers them minimal assistance or obligation to seek employment, a situation Milburn describes as “crazy” and in dire need of fundamental reform in a column in The Times.

Presenting his report alongside Liz Kendall, the Secretary of State for Work and Pensions, Milburn claimed that addressing the issue of record numbers of people outside the workforce is the “only route to higher levels of economic growth.” Kendall echoed this sentiment, acknowledging that tackling long-term sickness is central to Sir Keir Starmer’s economic growth plan. She promised a fundamental overhaul of Job Centres and back-to-work support systems to counter economic inactivity.

Kendall praised Milburn’s report as “brilliant” but stopped short of endorsing his proposal to impose conditions on sickness benefits. She emphasised the importance of enhancing health and employment services rather than focusing solely on punitive measures. “There have always been conditions to look for work and consequences if you don’t, that won’t change. But I want to see a much greater focus on that upfront help and support,” she said. “I think we’ve had too much of a focus on clampdowns rather than the help and support people really need to get into work.”

According to the ONS, 2.8 million people are off work due to long-term sickness, contributing to a total of 9.4 million people who are neither employed nor seeking employment. This represents more than one in five of the working-age population.

With the cost of sickness benefits projected to reach £64 billion annually by the end of the current parliamentary term, an increase of £30 billion from pre-Covid levels, Kendall highlighted the broader implications. “Spiralling economic inactivity is bad for individuals, many of whom want to work, it’s bad for employers who are desperate to recruit, and it is bad for our public finances,” she stated.

Divisive rhetoric about strivers versus scroungers, or claiming people just feel ‘too bluesy’ to work may have grabbed headlines, but it did absolutely nothing to actually get Britain working again

Kendall also dismissed assertions by her predecessor, Mel Stride, that the increasing classification of everyday worries as mental health issues was inflating the benefits bill. “Divisive rhetoric about strivers versus scroungers, or claiming people just feel ‘too bluesy’ to work may have grabbed headlines, but it did absolutely nothing to actually get Britain working again,” she said.

Arguing that the “vast majority” of claimants genuinely need help, Kendall pointed out that economic inactivity is largely driven by an aging and increasingly unhealthy population. She noted that the pandemic had a significant impact on the mental health of young people, promising earlier treatment and support. Kendall concluded that her department had become too preoccupied with managing benefits payments. “We need fundamental reform so a department for welfare becomes a genuine Department for Work,” she asserted.

Milburn’s review was announced in Barnsley, a town historically plagued by high unemployment rates but now seeing jobseekers replaced by the long-term sick. His research suggests that seven in ten individuals classified as unable to work expressed a desire for employment. Despite this, only one in ten of those on benefits had any interaction with employment services. “This is what you call a catastrophic systems failure,” Milburn said, adding that these findings could translate to an additional 4.5 million potential workers nationwide.

He highlights the imbalance in the current approach, noting that the number of economically inactive people vastly exceeds the number of officially unemployed, who engage with Job Centres regularly. “The officially unemployed are outnumbered now six to one by people who are economically inactive, who have no engagement with Job Centres. This is crazy,” he remarked.

Milburn criticised the Conservative government’s reliance on stricter benefit rules to address what is primarily a health-related issue, advocating for a balanced approach between punitive measures and support. He also pointed out the counterproductive nature of the benefits system, where those seeking work receive less assistance and face more hassle compared to those classified as unable to work.

Acknowledging that some individuals will never be able to work, Milburn emphasized the need for a system that supports those willing to work but currently unassisted. “We’ve got to have a two-way street,” he said. “The state will provide more help, greater personalisation, better integration, for example, of health and employment support services. But if you’re on state benefits and economically inactive, you have a duty to engage with those better services.”

Milburn, who is advising Wes Streeting, the health secretary, also said the NHS should be required to help employment services.