Spring Budget 2023 - Removing barriers to work
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Spring Budget 2023 - Removing barriers to work

16th March 2023
Client solutions

In the Spring Budget, Chancellor Jeremy Hunt has announced a raft of measures to try and remove barriers to work in order to tackle the ongoing skills and talent shortages faced by businesses across the country.

The measures announced in the Budget are designed to support four key groups:

  • Long-term sick and disabled
  • Welfare recipients
  • Older workers
  • Parents

They will “focus support towards those groups where inactivity levels are high or where employment support is most needed, including the long-term sick and disabled, welfare recipients, people aged over 50, and parents”.

From a recruiter’s perspective, it’s definitely encouraging to see the ‘back to work' emphasis in this budget and to see a raft of measures to support this sentiment. Skills shortages are causing huge issues for our clients, and practical steps to remove some of the barriers which prevent people from accessing employment are desperately required.

Whilst it’s understandable that some of these measures will take time to implement, (for example the full childcare provision support taking until 2025 to be fully realised), we wonder whether innovative employers could look to take the opportunity to offer short-term support to workers (in terms of childcare subsidies for example) in order to accelerate the ability of parents to return to the workforce. As ever, creative thinking and an agile approach are always required in order to attract the best talent!

The support for older workers is also really encouraging – including the removal of the Pension Lifetime Allowance, which should encourage skilled workers to remain in employment, and also the Returnerships programmes which will help to upskill returning workers.

At Outsource, our purpose is to eliminate bias, privilege and inequality in talent engagement – we believe that everyone should have the opportunity to be the best person for the job, and that people power businesses. If you’d like to discuss any of the measures in the Budget with us, or you’d like more information on the inclusive workforce solutions we provide, reach out to us.

T: 01793 430021

E: info@outsource-uk.co.uk

Key statistics

All stats and details are taken from the Budget 2023 full statement.

  • There are 230,000 fewer people in employment than at the start of the pandemic.
  • There are 410,000 more people reporting they are inactive due to long-term sickness since the start of the pandemic.
  • The ONS’s Over 50s Lifestyle Study suggested that those above 60 were most likely to cite ‘to retire from paid work’ as a reason for leaving work, while those aged 50 to 54 were more likely to cite ‘stress’ and that ‘I did not feel supported in my job’.
  • The UK inactivity rate is currently significantly higher than in the best performing OECD comparators; the UK has fallen from having the 8th lowest inactivity to 15th in the OECD since the pandemic.
  • Reducing UK inactivity to the same rate as the Netherlands, the second-best performer in the OECD, would result in 2.7 million more people in the labour force, an increase of over 8%.
  • There are currently 1.1 million vacancies in the economy, an increase of 300,000 since the start of the pandemic.

Budget 2023 employment strategy highlights

Supporting the long-term sick and disabled

  • There are more than 2.5 million people reporting that they are inactive due to long-term sickness, an increase of 26% since 2018.
  • Mental health and musculoskeletal (MSK) conditions are among the leading causes of unemployment.
  • Surveys show that one-fifth of people out of work and claiming the highest level of health-related income support benefits say they would like to work.

What’s changing:

  • New tailored employment support within mental health and MSK services in England, including expanding the Individual Placement and Support (IPS) scheme, and scaling up MSK hubs in the community.
  • New digitised NHS Health Check to identify and prevent more cases of cardiovascular disease.
  • New digital resources (such as apps for the management of mental health and MSK conditions) will be made available, to allow easy access to support services.
  • Pilot of new WorkWell programme, aimed at integrating employment and health support for those with health conditions, supporting individuals into employment / remaining in work.
  • New Health and Disability White Paper, setting out reforms to ensure those with disabilities have the right support, opportunities, and incentives to move into/remain in work.
  • The Work Capability Assessment will be abolished. Instead, claimants will benefit from tailored Work Coach support and be able to try to work without fear of losing their benefits.
  • More funding available for Work Coaches to help those who are long-term sick and disabled into work.
  • New Universal Support programme to support people with disabilities and long-term sickness into work, and to ensure they are supported to enter and stay in work by funding the necessary training and workplace support.

Measures to support welfare recipients

  • There are around 1.4 million people in Universal Credit’s most intensive work search regime, who are either unemployed or on low earnings and as such are expected to look for work or increase their hours.
  • If the size of this group was reduced by around 15%, there would be an additional 200,000 people in work or with higher earnings.

What’s changing:

  • Increased Work Coach support and work search requirements for a greater number of Universal Credit claimants to help them move into work and onto higher earnings.
  • Improved job support for claimants that are lead carers of young children who currently have no or limited requirements to search for and prepare for work.
  • Enhanced regime to ensure that Work Coaches have the tools and training to implement sanctions as effectively as possible, including for failing to take up a job.
  • Extended Youth Offer, which provides targeted support to unemployed young people on Universal Credit, to break down barriers to work.
  • An additional £8.1 million in funding in each of the next 2 years to expand the Staying Close programme to around half of local authorities by March 2025, to help young people in care into employment.
  • Expansion of the Additional Jobcentre Support Pilot in England and Scotland, to test how intensive support for a period of 2 weeks can support claimants, who remain unemployed after 13 and 26 weeks into their Universal Credit claim or on low earnings, into work.

Measures to support older workers

  • The UK’s inactivity rate for 55 to 64 year-olds is higher than that of the best performing economies in the OECD.
  • Matching the 55 to 64 inactivity rate of Sweden, a top performer, would add more than 1 million older workers to the labour force.
  • The number of inactive 50 to 64 year-olds has increased by 320,000 since before the pandemic, with this age group accounting for 65% of the increase in working-age inactivity over this period.

What’s changing:

  • Introduction of Returnerships, a new offer targeted at the over 50s, which brings together the government’s existing skills programmes, focusing on flexibility and previous experience to reduce training length. Returnerships will promote accelerated apprenticeships, Sector-Based Work Academy Programme placements and Skills Bootcamps to the over 50s.
  • Removal of the pension Lifetime Allowance charge, and raising of the Annual Allowance to £60,000 from April 2023.
  • The government will enhance the digital strand of the midlife MOT offer to ensure more people can access targeted online guidance regarding their careers, health and finances. DWP will also expand access to its in-person midlife MOT offer, providing financial planning and awareness sessions for 50+ Universal Credit claimants, aiming to reach up to 40,000 individuals a year.
  • New policies to encourage employers to support people back into work, to work more, and to prevent them from falling out of work.
  • Expansion of the forthcoming occupational health pilot subsidy scheme for small and medium-sized businesses announced by the Department for Health and Social Care and DWP in 2021.
  • Reform of the statutory framework for flexible working to provide employees with a day-one right to request their job be done flexibly.

Measure to support parents

  • There are 1.7 million people in the UK who report looking after their family or home as their main reason for inactivity.
  • Parents in the UK can face high childcare costs with net costs representing nearly 30% of the average wage for a couple with two children.
  • The UK’s female inactivity rate is higher than that of the best performing economies in the OECD. Matching the female inactivity rate of the Netherlands, a top performer, would add more than 1 million people to the labour force.
  • The employment rate and hours worked by parents, particularly mothers, drops after childbirth and persists until after their children reach school age.
  • There are around 435,000 parents in England with children under 3 years who are inactive due to caring responsibilities.
  • This group is made up disproportionately of women, and the more time they spend outside the labour market or working part-time, the lower their future expected earnings, worsening the UK’s gender pay gap.
  • The UK’s female inactivity rate is higher than in the best performing OECD economies
  • Many parents work fewer hours even when their children reach school age. A key driver of this is the accessibility of childcare provision, with only 64% of primary schools currently offering childcare at both ends of the school day.
  • Substantial increase in the amount of free childcare that working families can access. The government will provide over £4.1 billion by 2027-28 to fund 30 free hours per week for working parents with children aged 9 months up to 3 years in England, where eligibility will match the existing 3 to 4 year-old 30 hours offer.
  • From April 2024, working parents of 2 year-olds will be able to access 15 hours of free childcare per week, benefiting parents of up to 285,000 children.
  • This will be extended to working parents of 9 month to 2 year-olds from September 2024, benefiting parents of up to 640,000 children.
  • From September 2025, all eligible working parents of children aged 9 months up to 3 years will be able to access 30 free hours per week.
  • The government will provide start-up grants for new childminders, including those who register with a childminder agency.
  • The government will launch a consultation on further measures to support reform of the childcare market to improve the childcare offer for parents.
  • Launch of a new wraparound childcare pathfinder scheme and setting out the ambition that all parents of primary-aged children in England can access care in school from 8am-6pm, with national roll out over academic years 2024-25 and 2025-26.
  • Support with childcare costs upfront for parents on Universal Credit.

For full details of the Government’s labour market plans, see the below link:


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