As the UK adjusts to a new Labour government following the recent general election, all eyes are on upcoming changes to policy, including employment and welfare reforms.
The Labour Government has outlined an ambitious set of policies on welfare and employment, following the King's Speech in 2024. At Real Purpose, we've been tracking the latest developments closely to help our clients and partners understand and adapt to the changing policy landscape.
Welfare Policies for Disabled People
Key Commitments:
1. Equal Pay and Reporting: The government aims to introduce equal pay for disabled individuals and mandate pay gap reporting based on disability and ethnicity for large employers. This initiative is intended to close the current disability pay gap, which stands at approximately 14.6% (source.)
2. Local Support Plans: The government proposes devolving funding to local areas, enabling them to create integrated work, health, and skills plans to assist disabled individuals in finding employment.
3. Access to Work' Scheme Improvements: The government plans to clear the backlog in 'Access to Work' claims, ensuring that disabled individuals can receive necessary support without risking immediate benefit reassessment if employment proves unsuitable (source.)
4. Work Capability Assessment (WCA): The government has proposed changes to the WCA involving integrating it into the Personal Independence Payment (PIP) system. This shift aims to streamline disability assessments but raises concerns about increased delays and potential financial impacts on claimants. (Institute for Fiscal Studies)​​ (Institute for Fiscal Studies.)
5. Personal Independence Payments (PIP) Reform: In April 2024, the previous Conservative Government released a Green Paper on the future of PIP. Among the proposed changes were options to replace regular cash payments with:
A catalogue or shop scheme
A voucher scheme
A receipt-based system
One-off grants
The consultation on these proposed changes, which includes the possibility of replacing PIP with vouchers or a catalogue, is open until 22nd July 2024. To date, the new government has not commented on the proposed changes to PIP reform. (source)
Review and Reform of Universal Credit
The new Labour government has committed to reviewing Universal Credit (UC) to ensure it incentivises work and reduces poverty, as detailed in their manifesto. It is a shift from Labour's earlier position of abolishing UC to now reforming the system. The manifesto emphasises balancing rights and responsibilities, incorporating support mechanisms for those able to work while enforcing consequences for non-compliance​.
(Yahoo)​​ (LabourList)​
The government aims to simplify the UC system and make it more effective in encouraging employment. The party's approach includes localising the design and delivery of employment support services to better address community-specific needs, thus moving away from a one-size-fits-all model imposed from Whitehall​ (LabourList)​.Â
Additionally, there are plans to improve Jobcentres and expand support for those with ill health by partnering employment support programmes with local health services.​
At Real Purpose, we currently provide the Leicestershire Employment and Skills programme, which is funded by Leicestershire County Council and NHS Public Health. We are working to help individuals who use primary care services for their mental health or are at risk of mental ill health. A huge part of implementing our programme has relied on building strong partnerships with local health services including social prescribers at GP surgeries as well as local mental health recovery services.Â
We are happy to see that the government recognises the benefits of localised, healthcare-integrated employment support and plans to expand this.
Key Elements:
1. National Jobs and Careers Service:Â The government plans to merge Jobcentre Plus and the National Careers Service, creating a unified employment support system.
2. Local Work, Health, and Skills Plans:Â These plans will be tailored by local authorities and mayors to assist economically inactive individuals, particularly those with health issues (source).
3. Youth Guarantee: A commitment to ensure training, apprenticeships, or employment support for all young people aged 18 to 21.
Employment Law Reforms
Labour's manifesto includes significant changes to employment laws under the "New Deal for Working People," with proposals to be enacted within 100 days of taking office. Key reforms include:
1. Single Worker Status: All workers, except the genuinely self-employed, will receive the same rights and protections, including sick pay, holiday pay, and protection from unfair dismissal.
2. Immediate Unfair Dismissal Protection: The two-year qualifying period for unfair dismissal claims will be abolished, and the limitation period for tribunal claims will be extended from three to six months.
3. Flexible Working: Flexible working will be the default from day one, except where it is not feasible, with stronger rights to request such arrangements.
4. Right to Disconnect: Employees will gain the right to "switch off" outside agreed working hours, promoting work-life balance.
(source.)
Other reforms planned include extending statutory maternity and paternity leave, introducing bereavement leave, and strengthening protections for pregnant women against dismissal.Â
The government also plans to establish fair pay agreements through sectoral collective bargaining, repeal anti-trade union legislation, and enhance trade union rights, including easier union recognition and more robust collective bargaining.Â
However, some concerns have been raised regarding the potential dilution of these commitments and the practical implementation of these reforms.​
(Norton Rose Fulbright | Global law firm)​​ (Burges Salmon – independent UK law firm)​​ (Wirehouse Employer Services)​.
Stakeholder Reactions:
Disability Rights UK and Scope have welcomed Labour’s commitments but stress the need for immediate action and adequate investment in disability and carer benefits (source).
The Social Market Foundation calls for more detailed plans to achieve a world-class skills system (source).
Unions are broadly supportive of Labour’s proposed employment law changes, though some express concerns about potential dilution of commitments​ (source)​.
Conclusion
The Government’s proposed policies aim to improve support for disabled individuals, simplify Universal Credit, and strengthen worker protections. However, substantial implementation challenges persist, especially with the proposed reform of the Work Capability Assessment (WCA), which may worsen existing backlogs.
Clear and detailed information on these changes, including the potential overhaul of Personal Independence Payments (PIP), is needed.
At Real Purpose, we will continue to monitor these developments closely and provide insights to help you navigate these evolving policies.Â
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