Liz Kendall, the work and pensions secretary, said that her department would become “a genuine department for work” as the new government attempts to tackle the rise in economic inactivity.
“DWP has focused almost entirely on the benefits system, and specifically on implementing Universal Credit,” she said in a speech in Barnsley.
“Nowhere near enough attention has been paid to the wider issues – like health, skills, childcare and transport – that determine whether people get work, stay in work and get on in work.”
“We need fundamental reform so the department for welfare becomes a genuine department for work,” she argued.
Kendall confirmed that there will be a white paper focused on “getting Britain working again”. She also announced the creation of a Labour Market Advisory Panel, which will meet quarterly and provide advice to the government.
Her comments follow on from proposals announced last week, including working to ensure that Jobcentres focus more on helping people back into work rather than monitoring benefit claims.
Tackling inactivity has become a major issue for the government as it seeks to generate sustained economic growth. The UK is the only G7 economy where the participation rate has not recovered to its pre-pandemic peak, largely due to deteriorating public health.
A record 2.7m people are out of the workforce due to long-term health conditions, with mental health a major contributor to the increase.
As a result of health related inactivity, spending on sickness and disability benefits is set to increase by £30bn over the next five years, according to the Office for Budget Responsibility.
The white paper will develop commitments made in Labour’s manifesto, including a new national jobs and career service, devolving health and skills plans to local authorities and a youth guarantee for all young people aged 18 to 21.
White papers are documents produced by the government outlining proposals for future legislation. Commenting on X, Tony Wilson, director of the Institute for Employment Studies, suggested this would be the first white paper to focus specifically on employment since 2009. He said it was “long overdue”.
Jane Gratton, deputy director of public policy at the British Chambers of Commerce, welcomed Kendall’s focus on getting people back into work.
“The Government is right to focus on getting more people into jobs and giving local areas the tools to do it,” she said.
“We need better, more joined-up employment support for skills, careers and health care – together with flexible workplace policies and investment in training,” Gratton continued.
John Foster, chief policy and campaigns officer at the Confederation of British Industry (CBI), was also optimistic about the potential for the government’s reforms.
“Ensuring a more joined-up approach to tackling economic inactivity that is more locally responsive and which builds-in efforts to tackle long-term ill-health can help unlock the untapped potential within the labour market,” he said.
Alongside Kendall’s announcements on economic inactivity, Chancellor Rachel Reeves chaired the first meeting of the Growth Mission Board. The Board contains ministers across the government and is designed to ensure different departments work together on generating economic growth.
A key part of its role will be to develop a “modern Industrial Strategy” and push forward with plans to devolve powers to metro mayors and combined authorities.
“Growth is our number one mission and in our first few weeks this Government is taking the tough decisions to deliver on that agenda,” Chancellor Rachel Reeves said.