The new Spring Statement announced last week – or “mini budget” as it’s known – from HM Treasury introduces seismic changes to welfare benefits, as the government attempts to cut its costs. Takeaway message? The onus is now on employers, more than ever, to proactively support employee health and wellbeing to get, and keep, people in work.
Chancellor Rachel Reeves outlined a raft of welfare reforms which will ultimately reduce spend on these benefits by approximately £4.8 billion over the next five years.
The reduction in benefits predominantly affects disability and health benefits, with substantial changes to the eligibility criteria for Personal Independence Payments (PIP) and Universal Credit. The Work Capability Assessment will also now be abolished by 2028.
Changes intend to keep people in work
Reeves said that these changes intend to encourage people back, and to stay in, work.
In response to the Spring Statement, Society of Occupational Medicine CEO Nick Pahl said that “reforming the [welfare] thresholds is unlikely to be the lever that gets people back to work” believing that “the real opportunity lies in the quality and design of support provided”.
He said:
“For policy changes around welfare to be successful, they must be matched with effective support. We must move beyond cycles of ‘assessment’ and ‘reassessment’ and instead build comprehensive, responsive, and innovative support systems that work in tandem with the welfare financial support offering.”
Investment in return-to-work initiatives
While much focus post-statement has been on welfare cuts, David Williams, Head of Group Risk, Towergate Employee Benefits, stresses that the government also announced “investment in helping people to start work, stay in work or try a return to work without losing their benefits”.
For instance, the government aims to help individuals with work-limiting health conditions in starting or staying in work, building on existing programmes like WorkWell and Connect to Work. It pledged an investment of up to £1bn annually by 2029-30 in employment, health and skills support.
“These are all crucial initiatives to kick-start and inactive population,” said Williams.
Employers have a societal responsibility
He urged employers to “invest wisely in the welfare of your people; you may not see immediate growth today, but you will reap the rewards in future”.
These welfare cuts impact the most vulnerable people in society most. Katharine Moxham, spokesperson for GRiD, believes employers have a social, as well as economic, responsibility here.
She said:
“Workers with health conditions or disabilities need support now more than ever. In many cases, employees wouldn’t leave the workforce if they were better supported by their employer. Employers have a huge role to play here, being well-placed to help keep people in work and get them back to work. Employers that don’t look after their staff will miss out.”
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