By james art The government will seek to “tackle the root causes of economic inactivity”, Sir Keir Starmer said in a speech ahead of Chancellor Rachel Reeves’ first financial statement on Wednesday.
The funding will partly go towards rolling out a scheme by so-called pioneers in local areas, which will focus on reaching people who are not normally in contact with the system, according to the Treasury.
The plan to increase employment to 80% is part of the government’s growth mission.
Sir Keir said: “Rebuilding Britain and delivering growth will require the skills and efforts of all of us.
“That’s why this Budget will also make Britain work.”
“This will pave the way for reforms that tackle the root causes of economic inactivity and ensure that those who can work do.
“As a Labor government we will always help those who cannot support themselves, but the UK is the only G7 country for which inactivity is still higher than it was before Covid.
“And it’s not just bad for our economy, it’s also bad for all those who are disenfranchised.”
“So the Chancellor will announce £240m of funding to deliver local services that can help people get back into work and the dignity that comes with it.”
Labor has previously promised reforms to help the “blockade generation” back into work, and ministers expected to publish a working white paper, Take Britain, this autumn.
These reforms aim to combine a high expectations and high support approach, with the expectation that those who can work should do so, but should also be properly supported with real opportunities to get decent work.
About 2.8 million people are out of work due to long-term illness.
When Liz Kendall took over as Work and Pensions Secretary after the July election, she said Labour’s target of reaching an employment rate of 80% would mean putting two million more people back into work.
She also said powers and resources would be devolved to mayors and local areas to lead work, health and skills plans for the economically inactive.
The government will work closely with the mayors on the pioneer scheme.
Pioneers will be tasked with bringing together and streamlining work, health and skills support for people with disabilities and those who are long-term ill.
Around 800,000 people will also be switched to Universal Credit from the old Work and Support Allowance from this autumn instead of 2028, with the aim of giving them greater access to support to find and start work.
Ms Reeves said: “Due to years of economic neglect, the benefits bill is growing.
“We will build a Britain where people who can work will work, turning the page on the recent rise in economic inactivity and decline and towards a future where people have good jobs and our benefits bill is under control.”
Ms Kendall said: “Millions of people have been denied the chance to build a better life.
“This includes one in eight young people whose hopes for a brighter future are dashed and written off before they’ve even begun.
“Through our Get Britain Working plan, we will ensure that every young person is supported to find an income or training, while our new Jobs and Careers service will transform opportunities for all as we deliver the fundamental reforms needed to tackle spiraling inactivity, growth of the economy, and to take our first steps towards our ambitious employment rate of 80%.”
Economic inactivity increased by 900,000 to 2.8 million people from pre-Covid in 2020, with 85% of this due to those on long-term sick leave, according to a report by the BCG Center for Growth and the NHS Confederation published in September.