Spring Budget 2023: New govt employment measures seek to bust barriers to work

The Chancellor of the Exchequer has announced a series of measures designed to help people move into work, increase their hours, and extend their working lives, including for those on benefits.

In his Spring Budget statement, Jeremy Hunt said he was announcing “the biggest ever employment package and the best investment incentives in Europe”.

Measures announced by the Chancellor include:

The Lifetime Allowance charge will be removed before being abolished altogether, removing barriers to remaining in work and simplifying the tax system by taking thousands out of the complexity of pension tax.

The Annual Allowance will be increased from £40,000 to £60,000, incentivising highly-skilled workers to remain in the labour market. As a result of the pensions tax measures announced today, an estimated 80% of NHS doctors will not receive a tax charge with respect to accruals under the 2015 NHS career average scheme.

A new ‘Returnerships’ apprenticeship targeted at the over 50s will refine existing skills programmes to make them more accessible to older workers, giving them the skills and support they need to find a recognisable path back into work.

The midlife MOT offer will be expanded and improved to ensure people get the best possible financial, health and career guidance well ahead of retirement. There will be an enhanced digital midlife MOT tool and an expansion of DWP’s in person midlife MOTs for 50+ Universal Credit claimants, aiming to reach 40,000 per year.

A DWP White Paper on disability benefits reform will herald the biggest change to the welfare system in the past ten years, to make sure it better meets the needs of disabled people in Great Britain. This includes removing the Work Capability Assessment, meaning the majority of claimants will now have to do one health assessment rather than two. Reforms will also support claimants to try work without fear of losing their financial support.

A new voluntary employment scheme for disabled people and those with health conditions called Universal Support will be funded in England and Wales. The government will spend up to £4,000 per person to find them a suitable role and cater to their needs, supporting 50,000 places per year once fully rolled out.

A £406 million plan to tackle the leading health causes keeping people out of work, with investment targeted at services for mental health, musculoskeletal conditions, and cardiovascular disease.

Strengthening work search and work preparation requirements for around 700,000 lead carers of children aged 1-12 claiming Universal Credit in Great Britain.

Increasing the Administrative Earnings Threshold (AET) – which determines how much support and Work Coach time a claimant will receive based on their earnings – for an individual claimant, from the equivalent of 15 to 18 hours at National Living Wage and removing the couples AET in Great Britain. Over 100,000 non-working or low-earning individuals will be asked to meet more regularly with their Work Coach for support to move into work or increase their earnings.

The application and enforcement of the Universal Credit sanctions regime will be strengthened, by providing additional training for Work Coaches to apply sanctions effectively, including for claimants who do not look for or take up employment, and automating administrative elements of the sanctions process to reduce error rates and free up Work Coach time.

Elsewhere, international talent will be attracted through a new migration package that includes adding five construction occupations to the Shortage Occupation List and expanding the range of short-term business activities that are covered under the UK’s six-month business visit visa offer.

Responding to the Spring Budget announcements, Stephen Evans, chief executive of Learning & Work Institute, said:

“There are some very welcome and substantial measures to help people back to work, including investment in childcare and better joined-up support from health and work services. However, only one in ten out-of-work disabled people and older people get help to find work each year, and the measures miss many who are not on benefits but want to work. The Government should tread carefully in changing disability benefits to avoid the risk of a postcode lottery for disabled people.

Care is needed to avoid lower benefit payments for hundreds of thousands of people who leave work due to ill health but are not entitled to a Personal Independence Payment. The answer is more help and support, not just a bigger stick.

The lack of new measures to work with employers on recruitment and job design is also a huge missed opportunity, while skills funding will still be £1 billion lower in 2025 than in 2010.

Overall, this is a significant step forward, but there’s much more to do to tackle worker shortages.”

Stephen Evans, chief executive of Learning & Work Institute, said