New cash for job centres in plan to boost workforce

Prime Minister Sir Keir Starmer has promised to get more people into work with reforms to overhaul job centres and more mental-health funding.

Sir Keir said the government had inherited a country that "isn't working", and the changes would tackle the biggest drivers of unemployment and inactivity.

But many details of what the reforms will mean in practice have not been confirmed, and a review of sickness benefits will not begin until next year.

The Conservatives said the proposals showed Labour was "not prepared to take the tough but necessary choices to bring down the benefits bill".

The government's proposals come as it faces a major backlash from business over tax rises in announced in last month's Budget.

Companies says the increase in National Insurance payments, together with the rise in the minimum wage, will make them less likely to create new jobs and ultimately hit the government's goal of growing the UK economy.

But on Monday, Chancellor Rachel Reeves defended her decisions. She said despite "a lot of feedback" on her tax and spending plans, she had not heard many alternatives.

While unemployment stands at almost 1.5 million, the number of people classed as economically inactive - not employed or actively looking for work - has jumped to more than nine million. It surged during Covid, but has remained persistently high since.

The rate of UK economic inactivity is at its highest among 16 to 24-year-olds.

There are also 2.8 million people out of work due to long-term sickness.

Gary Wroe, managing director of Hockley Mint, a jewellery manufacturer in Birmingham, employs 98 people and take on a number of apprentices each year but Mr Wroe said the business would struggle to continue to recruit apprentices given the National Insurance rise.

One of his current apprentices, Abi, 17, said she knew of people who had left school but had not gone on to work.

"I think a lot of it does actually come down to lockdown. I think because people just kind of sat in the house and they didn't do anything," she added.

Peter Cheese, chief executive of HR body the Chartered Institute for Personal Development, said the plans were "a step in the right direction" but called for "more ambition" to "make apprenticeships a viable alternative to university".

There have been question-marks over the reliability of data on employment due to a decline in the number of people taking part in the official Labour Force Survey.

Recent analysis by the Resolution Foundation think tank suggested the survey had underestimated employment growth since 2019, and overestimated economic inactivity.

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