The welfare state of the 20th century was designed to provide support from the cradle to the grave, but the changing demographic profile of Britain - longer life-spans mean that by 2007 the number of people over state pension age will exceed the number of children - presents a challenge to such a system of support. This plan sets out the Government's strategy of aiming for an 80 per cent employment rate as the best means of keeping people out of poverty, and allowing saving for a secure retirement. Such an aspiration requires the movement into work of a proportion of those people traditionally seen as outside the labour market and with complex barriers preventing entry into that market. Supporting these inactive people into employment will require carefully tailored support. The strategy outlines the approach in three major areas: (1) supporting children and families, including helping lone parents into gainful work; (2) helping those on incapacity benefits to return to work; (3) breaking down barriers to employment faced by disabled people, older workers and ethnic minorities.
The costs of working-age ill-health to Britain are large by any standards. Dame Carol Black estimated that the annual economic cost of ill-health in terms of working days lost and worklessness was over £100 billion. The Confederation of British Industry (CBI) estimated that last year 172 million working days were lost due to absence, costing employers £13 billion. Against a backdrop of a wider economic downturn both taxpayers and businesses can ill afford to bear these largely unnecessary costs. But the cost of ill-health cannot be measured in pounds and pence alone. There are about 2.6 million people on incapacity benefits and 600,000 people make a new claim each year; of these, half had been working immediately before they moved onto benefit. Once out of work it is likely that an individual's health will worsen and they and their families are more likely to fall into poverty and become socially excluded. Therefore, health-related inactivity prevents individuals from fulfilling their potential, causes needless financial hardship, and damages the communities in which people live. This response is built around three key aspirations that demonstrate how the Government will rise to the challenges set by Dame Carol: creating new perspectives on health and work (chapter 2); improving work and workplaces (chapter 3); and supporting people to work (chapter 4). Chapter 5 details how the Government will measure progress against its targets, and chapter 6 sets out future steps that the Government intends to take: better integrating skills, health and employment provision; reviewing the incentives for individuals, employers and the state to tackle sickness absence to ensure they are optimally balanced; and continuing to develop strategies to address the specific needs of those with poor mental health.
This White Paper follows the consultation paper "No one written off: reforming welfare to reward responsibility" (Cm. 7363, ISBN 9780101736329) which was itself based on the reforms proposed by David Freud in his report "Reducing dependency, increasing opportunity: options for the future of welfare to work" (2007, DWP, www.dwp.gov.uk/publications/dwp/2007/welfarereview.pdf). It sets out how the Government plans to take the proposals forward. The Government's vision for the welfare state is one where everyone is required to fulfill their responsibilities to prepare for, look for and take up work, with support provided at all stages, particularly given the recent economic downturn. The Government proposes a simpler benefits system, with the development of a single income-replacement benefit for people of working age: initially those currently on Income Support will move to either the Employment and Support Allowance or Jobseeker's Allowance. Changes to Housing Benefit will also be investigated in 2009. Jobcentre Plus is an effective delivery vehicle and will receive an extra £1.3 billion funding, but it will be supported by more use of private and voluntary services (which already supply 40 per cent of DWP's employment programmes). Devolving power to the local level will increase effectiveness of service delivery. This paper also responds to and supports the Gregg report on personal conditionality ("Realising potential ... ISBN 9780101749923) where everyone on benefits is expected to take active steps towards work. Support for disabled people will be enhanced and become more personalised. Those on incapacity benefits will move to the Employment and Support Allowance. More support for jobseekers will be matched by higher expectations. All the reforms are designed to increase employment and release resources for the ending of child poverty by 2020.
The UK's pensions system is need of reform for two primary reasons. Firstly, the UK has an aging population and secondly, working age people are not saving enough to meet their expectations of income on retirement. The Government has already begun to set in train a series of reforms. In particular it has brought forward plans to increase State Pension age; set out proposals to create a single-tier State Pension to provide a firm foundation for saving for retirement; and introduced automatic enrolment into workplace pensions. We do, though, also need to ensure that those people saving privately for their retirement are doing so in high quality schemes. This strategy sets out the key issues which need to be tackled. The reinvigoration objectives include: increase the amount people are saving in pensions; increase the amount people receive for their savings; enable industry innovation to develop products which will give more certainly about pensions; increase transparency; and ensure the sustainability and stability of the UK pension system.
Department for Work and Pensions' management of information technology Projects : Making IT deliver for DWP customers, Vol. 2: Oral and written Evidence
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