Keir Starmer issues DWP update as he signals radical benefits shake-up

The Prime Minister has promised to get two million more people into work with reforms to jobcentres alongside partnerships with employers, including the Premier League and the Royal Shakespeare Company. Central to the new regime will be moves to tackle poor physical health, including obesity, plus the recruitment of thousands of counsellors to combat a mental health crisis, particularly among the young.

There will also be new checks on eligibility for benefits, which has drawn criticism from charities supporting the disabled, and a crackdown on benefit fraud as part of a wider effort to cut more than £3billion from welfare spending. A document published alongside the announcement signalled a major shake-up to the benefits system but failed to give details on the changes.

It stated: “The government believes there is also a strong case to change the system of health and disability benefits across Great Britain so that it better enables people to enter and remain in work, and to respond to the complex and fluctuating nature of the health conditions many people live with today. The government will bring forward a Green Paper in spring 2025. We will listen to and engage with disabled people as we develop proposals for reform in this area and across the employment support system.”

READ MORE: DWP benefits changing in December for pension credit, PIP and Universal Credit

READ MORE: Labour's 'Back to Work' plans could target eight common PIP health issues

Some £240 million will be spent in a radical change to how jobcentres operate to ensure they work as a bridge between employers and those looking for work, while providing a national careers service. Significantly, the government has said young people must take up offers of a job or training, or lose their benefits, but it has not spelled out how such sanctions will work or when they will come into force.

The government has pledged to increase the employment rate to 80 percent from its current level of around 75 percent, which would mean around two million more people in work. Disability groups and charities fear the proposals will put unfair pressure and stress on the sick and stigmatise those who are out of work as skivers.

At the same time, some employers argue the government’s proposals are unlikely to be effective at a time many of them face new taxes that make it more difficult to hire people, particularly those at the bottom of the income scale. Sir Keir insisted the overhaul would focus on supporting people to find work, rather than shaming or punishing people.

He said: "From the broken NHS, flatlining economy, and the millions of people left unemployed and trapped in an inactivity spiral - this government inherited a country that simply isn't working."

The Prime Minister said the "Get Britain Working" would give young people “the skills and opportunities they need to prepare them for the jobs of the future”.

He added: “Our reforms put an end to the culture of blaming and shaming people who for too long haven’t been getting the support they need to get back to work. Helping people into decent, well-paid jobs and giving our children and young people the best start in life - that’s our plan to put more money in people’s pockets, unlock growth and make people better off.”

A government statement issued alongside the announcement said: “The outdated Jobcentre system will also be transformed into a new national jobs and careers service, focused on people’s skills and careers instead of just monitoring and managing benefit claims. Mayors and councils will be empowered to join up local work, health and skills support in ways that meet the specific needs of their local areas.”

The government is also promising a new Youth Guarantee so every young person has access to education or training to help them find a job. Some £40 million will be invested to expand opportunities for young people to develop skills and get into work.

The DWP Secretary of State, Liz Kendall MP, said a major element of the proposals is designed to cut billions of pounds from the nation’s benefit bill. She said; “To get Britain growing, we need to get Britain working again. Our reforms will break down barriers to opportunity, help people to get into work and on at work, allow local leaders to boost jobs and growth, and give our children and young people the best opportunities to get on in life.

“We can build a healthier, wealthier nation – driving up employment and opportunity, skills and productivity – while driving down the benefit bill.”

Government figures show that one in four of all people aged 16-64 have a long-term health condition that limits their day-to-day activities with disabled people nearly three times more likely to be economically inactive. As a result an additional £22.6 billion of resource spending in 2025-26 for the Department of Health and Social Care. This will support the NHS in England to deliver an additional 40,000 elective appointments a week and make progress towards the commitment that patients should expect to wait no longer than 18 weeks from referral to consultant-led treatment.

The Government will deliver an additional 8,500 new mental health staff and also expand access to Individual Placement and Support (IPS) for severe mental illness, reaching 140,000 more people by 2028/29. On top of this, the Government will take a prevention first approach through an expansion of Talking Therapies, a landmark Tobacco and Vapes Bill and a range of steps to tackle obesity.

The White Paper sets out how the Government will invest £125 million in eight areas across England and Wales, to mobilise local work, health and skills support – so everyone who wants to work can get the joined-up support they need. This includes funding in three of the trailblazer areas for NHS accelerators to stop people falling out of work completely due to ill health. The three areas will be the North East, South Yorkshire and West Yorkshire.

Peter Cheese, chief executive of HR body the Chartered Institute for Personal Development, said the plans were "a step in the right direction" but called for "more ambition" to "make apprenticeships a viable alternative to university".

But Catherine Parsons, who oversees the Big Issue's specialist employability service Big Issue Recruit, said that "scare tactics" around benefit eligibility and fraud would only exacerbate Britain's worker shortages. She said: "We know that the steep rise in anxiety and mental health problems in young people has had a direct impact on their ability to find and retain good jobs.

"The new looming threat of having their benefits axed should they fail to summon the mental strength to accept work or training will only continue the vicious cycle of failure that has seen economic inactivity and the welfare bill spiralling out of control in recent years."

Some in the business and finance community were sceptical about the proposals, suggesting that budget changes that push up the cost of employing people will have a bigger effect. Stephen Perkins, Managing Director at Yellow Brick Mortgages, said: "If the government thinks that spending taxpayers' money rebranding job centres is tackling the main drivers of employment inactivity then they are delusional.

“Pushing for young people to take jobs, whilst also making them massively more expensive to hire, means there won’t be the jobs on offer. Taxing employers does not increase opportunities or appetite to hire, and the National Insurance rises will see more people laid off."

Rohit Kohli, Director at The Mortgage Stop, told Newspage: “UK businesses are still reeling from the disaster of a Budget, with many cancelling recruitment plans. I have no clue what the goal is here other than a vanity project that comes straight out of the 1980s.”

Riz Malik, Independent Financial Adviser at R3 Wealth commented: "The timing of this announcement is absurd. How are you going to get Britain working again when major employers have said they will be freezing or cutting recruitment post-Budget? The government are clutching at straws and have no idea how to fix this economy. You don’t need a degree in economics, you just need common sense, which our cabinet seems to lack."

Ben Perks, Managing Director at Orchard Financial Advisers, said: "For 20+ years, job centres have really only been used to make sure people claiming Job Seekers' Allowance are up, out of bed and trying to find work. Finding a job has been done online or via recruitment agencies for some time now. It seems a hefty renovation sum and out of touch with the digital age of job search."