Mark Byers knows what he would do if he had an extremely powerful magic wand to wave over the South Shields jobcentre where he works. “I would get funding for people with long-term health conditions,” he says. “Five or six years ago, they would have got help for their health issues a lot more quickly. For mental health conditions, nowadays that could be a six-month wait.”
Byers – who is speaking to CSW in his capacity as a PCS union rep – estimates that around half his caseload has a disability or health condition. “A lot of them want to work,” he says, but he feels unable to help them. “I’m moderating and releasing benefits rather than supplying actual support.”
For want of a super-powered magic wand, government is putting strategic focus and money behind the problems that Byers is reporting from the frontline, which reflect a nation-wide crisis in health-related economic inactivity, and a spiralling welfare bill. The Pathways to Work green paper, published in March and out for consultation until the end of June, pledges £1bn of new money to fund personalised employment support for people whose disability or health condition limits their capacity to work, scaling up to £1bn a year by 2029-30.
Alongside this, work and pensions secretary Liz Kendall has spoken of “combating health-related inactivity at its root” with a £26bn investment in the NHS, alongside “two million extra appointments to reduce medical waiting lists”. And health secretary Wes Streeting has committed to expanding the Department of Health and Social Care’s focus to target economic growth, arguing that “by cutting waiting lists, we can get Britain back to health and back to work”.
On the face of it, this looks like a shining example of joined-up government. Clearly, Kendall and Streeting have understood that the nation’s relationship to work is inseparable from the state of its health, and that neither crisis can be solved in isolation. As ex-John Lewis chairman Sir Charlie Mayfield says in his Keep Britain Working review: “Good work can be protective of health and prevent issues from occurring. We should be striving to achieve that.”
But the stakes are high. The Institute for Fiscal Studies has warned that – with no change to the current trajectory in new claims – the number of people claiming health-related benefits could reach 5.8 million by 2028-29. This would represent 13% of the working-age population. And if government does succeed, it could offer hope to a large group of people. According to Department for Work and Pensions research, of all the claimants who don’t rule out work, some 50% say they could work if their health improved.
Niall O’Reilly, head of IPS Grow, is broadly positive about the suite of measures proposed in DWP’s green paper, which include expanding access to IPS-supported employment services. IPS – which stands for individual placement and support – is aimed primarily at people with severe mental illness: a cohort central to government’s goals. O’Reilly is confident that his services can be part of the solution.
Of those using one of the 281 IPS services across England and Wales, an average of 40% will move into paid employment, O’Reilly says, referring to the fidelity data that he monitors. Central to the success of the model is the principle that IPS reaches people wherever they are in the community. “Every time work comes up as part of the conversation within any part of the system, there should be easy access to an employment service,” O’Reilly explains. “It should all be joined up around me, so I don’t need to go into some eight-stage referral and get lost in the system. There should be someone down the corridor in that very centre.”
And this is where O’Reilly’s optimism starts to waver. “What the government has done is very welcome,” he says. “But it’s only half the equation. We need to go further to embed those changes”.
What should the other half of the equation look like? “We need a rewiring of the health system to put work at its centre,” O’Reilly says. “Every part of the health system should be engaging with employment services.” As a starting point, he says: “I would like to see a very prominent place for employment in the [forthcoming DHSC] 10-Year Health Plan.”
Is this likely to happen? DHSC’s Change NHS consultation and DWP’s Pathways to Work green paper are operating separately, running on separate timeframes and coordinated by separate departments. To state the obvious, they are two separate strategies. O’Reilly acknowledges the efforts government is making to break out of its silos. The Joint Health and Work Directorate – which has a cross-departmental focus on better aligning the work and health systems – is one such example. But he is calling for more high-level alignment: “We need joint action by Liz Kendall and Wes Streeting working together. Joint action is the only way to get this to work.”
The focus on NHS waiting lists as a solution to the problem of health-related worklessness is exasperating to Jeremy Bernhaut, associate director of policy and influencing at Rethink Mental Illness. He points out that people are “eight times more likely to wait over 18 months for mental-health treatment than physical-health treatment”. And yet NHS waiting list targets are focused on physical health. “Which is fine if you have a bunion,” Bernhaut says, but it doesn’t help the rising number of people whose mental health is making them unwell and limiting their capacity to work.
“We need a rewiring of the health system to put work at its centre. Every part of the health system should be engaging with employment services”
Niall O’Reilly, IPS Grow
The rising number of people experiencing mental illness is significant: more than half of the rise in 16 to 64-year-olds claiming disability benefits since the pandemic is due to an increase in claims for mental-health conditions, according to the IFS. Bernhaut thinks this should be tackled through a concerted effort to shrink waiting lists for mental-health treatment before benefit entitlements are tightened. And he thinks the notion of “over-diagnosis” is unhelpful here. The likely reason for the increased number of claimants is that “people are more unwell than they were before, and also more prepared to admit to being unwell”.
Dr Emily Andrews, deputy director for work at the Centre for Ageing Better, shares Bernhaut’s exasperation, although it has a different focus. “Government and campaigners are really concerned about health-related youth economic inactivity, because that’s where there’s been the biggest increase,” she says. “But half of all people who are inactive due to poor health are aged 50 to 65.”
She points out that countries which have achieved an 80% employment rate “all have much higher rates of employment among people aged 55 and over than the UK, as well as much higher youth-employment rates”. And yet “there is no acknowledgement that over-55s are a key group, and no discussion [in the green paper] of how government plans to push up the employment rate for them”.
And of course, no cohort is entirely distinct. “The most prevalent work-limiting health conditions for the over 50s are still musculoskeletal,” Andrews says, “but also, increasingly, it’s mental health”.
Another omission from DWP’s green paper is long Covid – a cluster of conditions which is thought to affect two million people across the UK, according to Office for National Statistics figures from 2024. More research is needed to understand long Covid and how those impacted can be supported back to full health, and in the meantime employment might not be easy. Especially if – as Byers points out – their health condition sits alongside other challenges, such as “childcare responsibilities, training needs, homelessness and addiction”. For many people, their health is only part of the picture.
Part of the difficulty with the government’s goals around health-related worklessness is that nobody seems to fully understand the underlying problem. People are less well, as Bernhaut says, but why?
In its 2024 study on health-related benefits, the IFS said: “Given the lack of clarity on the underlying cause, there are no obvious solutions to this growing problem.” The study points out that “the Covid-19 pandemic and the resultant spike in NHS waiting lists have both been suggested as potential causes” for an apparent worsening of the nation’s health.
But a new IFS study, published in May, casts doubt over the premise that reducing NHS waiting lists might slow the growth of health-related inactivity. The study examines NHS waiting list data in local areas and compares it against health-related benefit claims in the same locality. It concludes – with some caveats – that NHS performance “has not been a major factor behind the large increase in the number of working-age adults receiving health-related benefits” and suggests that “the main explanations for rising claimant numbers almost certainly lie elsewhere”.
“NHS waiting list targets are focused on physical health, which is fine if you have a bunion”
Jeremy Bernhaut, Rethink Mental Illness
The caveats to this study are important in the light of Bernhaut’s point about mental-health waiting lists, and the need for government targets to reduce them. The study only looks at waiting list data for NHS talking therapies, which are typically provided for less acute mental-health conditions, such as anxiety and depression. It also makes clear that there is “less consistent data” for mental health treatments and their waiting lists than for elective NHS care. The potential impact of reducing NHS waiting lists for more severe mental health conditions is unknown.
The same IFS study highlights the caveats in DWP’s research into the number of claimants who claim they could work if their health improved. The average respondent to the survey carried out by DWP agreed with six out of 18 potential barriers to work, including: “that work would make their health condition worse (76% of claimants who do not rule out work permanently agreed); that it is difficult to travel to work with their health condition (also 76% of those claimants); that their health condition fluctuates too much (70%); and that they are worried that people will not employ them because of their health condition (69%)”.
As if the picture were not murky enough, there is also uncertainty over the possible impact of the £1bn-a-year investment in employment support, until the Office for Budget Responsibility has assessed the labour-supply impacts of welfare reforms in its autumn forecast. Drawing on previous studies, government says that “for every 10,000 additional people in full time work, there would be fiscal savings of around £180m per year, with societal savings around £280m per year”. This could drive fiscal and social returns “in the billions of pounds”, according to the Spring Statement impact report, published in May.
While we wait for the OBR’s autumn forecast, the Learning and Work Institute, in partnership with the Joseph Rowntree Foundation, has crunched some numbers. Their most optimistic projection of the increased number of people with a disability or health condition who will gain employment as a result of the promised government spend on employment support in this parliament is 115-165,000 people. Based on government’s figures in the Spring Statement impact report, this could translate to a £4.62bn saving.
The Learning and Work Institute says this optimistic number is based on government succeeding in its goals “to reduce NHS waiting lists, work with employers to promote recruitment and retention of disabled people, and improve economic growth so more job opportunities are available”.
Which suggests that government could come close to saving the promised £4.8bn in this parliament, achieving a significant reduction in health-related worklessness, provided everything they are aiming to do is successful. It will all need to come together in a joined-up way and be sustained over the longer term. There is no room for any element of it to fail.
Is there sufficient cause for optimism? O’Reilly thinks so. “We want the government to succeed,” he says. He believes there is a lot of good practice about, such as the work that Andy Burnham is doing in greater Manchester, “taking a holistic approach, bringing together health advice, debt support, and providing an aspirational, appealing offer for people to engage with. We would like to see IPS services as part of that,” he says.
For Bernhaut, who remains “really, really worried” about proposals to cut welfare spending, and the knock-on effect on people’s mental health, it is harder to be optimistic. He’s glad there will be “a bit more diversity in the employment support that’s out there”, such as the youth guarantee trailblazers – eight pilot sites that aim to support young people into education, employment or training. He is also hopeful about the WorkWell pilot sites, which went live in 15 areas in October, and will provide a gateway to local work and health provision.
There is a prominent aspect of government ambition that Bernhaut is glad about: “We 100% support [DHSC’s proposals] in terms of moving from disease to prevention and from hospital to community. That’s fantastic. People really should be treated for mental health in the community before it gets to the point where hospital is needed.”
Prevention of ill health is the area where DWP and DHSC ambitions dovetail: it is central to the vision of a reformed NHS, and to the productivity of the workforce. It is the word that comes up repeatedly in conversations with experts in this space. Mayfield’s review singles out “prevention, retention, early intervention and rapid rehabilitation in the workplace” as the approach that differentiates countries performing better than the UK in this area. But prevention is not a quick fix. The Institute for Government has identified a “tension between delivering immediate savings and achieving the longer-term goal of helping people into secure work”, which potentially “risks undermining a genuine reset in the relationship with sick or disabled individuals”.
A genuine reset is what Byers hopes for. “Ten-minute appointments are not an ideal way to build a relationship of trust,” he says. “The relationship of trust is everything.” He hopes the promised investment in employment support will let him refer people to services that will offer appropriate support, and will let him offer “much longer appointments” to those who need it, so he can “look at what support and training they could get, talk them through the childcare options and so on”. A joined-up approach that brings everything together around the person? “Exactly,” Byers says. “That would work.”