Economic Growth: Unemployment

In its 2023 Fiscal Risks and Sustainability Report, the Office for Budget Responsibility (OBR) examined the economic implications of rising long-term inactivity due to ill-health.

The government recognises the significant risks this poses to individual opportunity and economic growth. It is taking action to address ill-health inactivity, including:

• Addressing rising youth inactivity through an independent review into young people and work, led by the former Health Secretary, Alan Milburn. Milburn has published his interim diagnostic report which sets out detail on the issues facing young people across education, health, skills and welfare with the final report expected in Autumn.
• Expanding employment support for disabled people and those with health conditions. Under the Pathways to Work Guarantee, anyone eligible will have access to 1,000 new specialist work coaches and tailored support, including expanded Connect to Work and new employment and health programme.
• Rebalancing the rates of Universal Credit from April to reduce inactivity incentives, backed by up to £1 billion of additional employment support in 2029-30.
• The Health and Growth Accelerators – a £70 million programme across three Integrated Care Boards, bringing together work and health support, to help people remain in or return to work through early intervention and prevention.
• Accepting the Keep Britain Working Review recommendations which include encouraging employers to embrace a healthy employment lifecycle and developing better workplace health provision.

This is alongside offering eligible working parents of children aged 9 months to four years 30 hours a week of free childcare, up to 38 weeks a year. This supports parents to return to work or increase their hours, while improving outcomes for children through access to high-quality early education.