In the UK, the rate of unemployment among 16-64-year-olds is 4.4%. Although slightly higher than the pre-pandemic level, it is still low by historical standards.

The rates of “economic inactivity”, as economists call it, have shown a distinct trend. Inactivity is defined as not working or actively seeking work. It can be caused by retirement, study, caring responsibilities, or long term ill health.

The number of people who report being out of work due to health problems has increased significantly in recent years. The Office for National Statistics (ONS) reported that in the period of May-July 2019, 2,048,000 16 to 64-year-olds were economically unemployed for long-term reasons. This figure has risen by over half of a million due to the pandemic.

The UK has 957,00 job vacancies in the entire economy. Around 150,000 more jobs are available than before the COVID.

People who fail to attend consecutive Jobcentre appointments may be sanctioned. Michael Heath|Alamy

What is the back-to-work plan?

Four existing programs are boosted to focus on health and unemployment support.

Additional 384,000 people will now be able to access the mental health treatment programme NHS Talking Therapies, and 100,000 more people will have access to the Individual Placement and Support Programme, which is integrated into community mental health services.

Restart, the long term unemployment scheme for Universal Credit claimsants, will now be extended for two years in England and Wales and the intervention period will be brought forward. Restart will provide support to people after only six months on Universal Credit. Jobcentres in England and Scotland will also receive additional support.

The number of beneficiaries under the Universal Support Programme is expected to rise to 100,000 from 50,000. The programme will provide 12 months of personalised support, a key worker and funding of up to PS4,000 for training or health condition management.

The Back to Work Plan also launches the new WorkWell program, which will be tested in 15 different areas of England. The aim of this plan is to find employment for 60,000 people who are long-term disabled or sick.

The government is targeting a long-term reform of the medical assessment system used to determine disability benefits. The Work Capability Assessment, which is used to assess the severity of health restrictions for employment purposes, will be changed in 2025. If successful, this change could lead to a reduction in the number of disability benefit claims.

The Office for Budget Responsibility predicts that a change in the Work Capability Assessment would reduce the number of cases with more severe disabilities by 371,000 while increasing the numbers of less severe disability cases by 342,000. The OBR estimates that changes to the assessment will increase employment only by 10,000 jobs by 2028-29.

Plan also includes additional sanctions and conditions, such as mandatory work placements, additional contact with Jobcentres for Universal Credit claimants and a review of those who are still unemployed following Restart. The study could trigger other conditions for work search – if they are not met, the claimant’s claim may be denied.

The plan specifies more severe sanctions for people who are considered “disengaged,” such as those who miss multiple consecutive Jobcentre appointments. The program specifies that sanctions could include the closure of benefit claims and withholding of other support such as prescriptions or legal aid.

What will be the impact of this plan?

The extension of services and the linking of health and employment in the support offered to job-seekers are positive steps. According to research, specialist services can be a key factor in helping people to return to work or remain employed despite health issues.

These measures will likely have a limited impact on the employment market in the near future. According to the OBR, the combined effect of all welfare measures included in the autumn statement and the Back to Work plan will only increase employment by 50,000 by 2028/29.

The government should also take other measures, such as tackling the long wait times for hospital treatments. Over the last decade, the number of people with ill health in the workforce has increased from 2.3 million to 3.7 million. The UK must adopt a more ambitious and comprehensive approach to health and work.

The punitive measures are also less effective in dealing with current labor market problems. Research shows that despite sanctions having a small positive effect on the rate of people finding jobs, these jobs are often of lower quality. Sanctions can also lead to financial hardship.

It also seems counterproductive that the government’s rhetoric about the plan includes references to people taking taxpayers “for a ride,” or as Stride put it. By stigmatizing back-to-work support, it is likely to alienate those whom the plan’s support mechanisms are intended to engage.

The research on health and work shows that people need individualized and integrated assistance. Many of the plan announcements are positive in this regard. They are modest, however, in comparison to the magnitude of the problem. The program will likely have a greater impact on people’s employment than it does on their ability to access benefits.