Around 1.8 million people on Universal Credit are not receiving support to find employment, according to new data from the Department for Work and Pensions (DWP).
The number of claimants in the Limited Capability for Work Related Activity (LCWRA) category has nearly quadrupled since the pandemic, rising from 360,000 to 1.8 million – a 383 percent increase in less than five years.
The figures indicate a sharp rise in young people affected. Since the start of the pandemic, the number of 16 to 24-year-olds in the LCWRA category has increased by 249 percent, growing from 46,000 to 160,000. Almost one million young people are now not in education, employment or training.
The government has announced initiatives aimed at addressing economic inactivity, including changes to Jobcentres, increased powers for local mayors and a Youth Guarantee to ensure all young people are in work or training. The figures come ahead of planned welfare reforms designed to create a more inclusive labour market.
Government Plans for Welfare Reform
Work and Pensions Secretary Liz Kendall has outlined plans to reform the welfare system, which she says is failing to support those who want to work.
“Millions of people have been locked out of work by a failing welfare system which abandons people – when we know there are at least 200,000 people who want to work and are crying out for the right support and a fair chance,” Kendall said.
The Work Capability Assessment (WCA) currently determines whether claimants are classified as “fit for work” or “not fit for work.” Those deemed unfit are placed in the LCWRA category, meaning they receive no employment support and have no further engagement with the system after their assessment. The government has indicated that it plans to either reform or replace the WCA to prevent claimants who want to work from being locked out of employment opportunities.
Financial Incentives and Systemic Issues
Under the current system, claimants aged 25 and over receive a standard Universal Credit payment of £393.45 per month. Those with a health condition receive an additional £416.19. The government argues that this structure creates a financial incentive for claimants to remain in the LCWRA category, as it provides a higher payment but removes access to employment support.
Over the past five years, 67 percent of Universal Credit claimants who have undergone a WCA have been classified as LCWRA. The government attributes this to flaws in the assessment system, which it claims pushes people to prove they cannot work rather than supporting them into employment.
Beyond Universal Credit
To address health-related barriers to work, the government has pledged investments for £26 billion in the NHS. This includes funding for two million additional medical appointments to reduce waiting times and the recruitment of 8,500 mental health workers to support people in staying healthy and in work.
Alongside these measures, the government has announced a £250 million investment in employment initiatives. This includes redeploying 1,000 Work Coaches to provide intensive employment support to approximately 65,000 people with health conditions or disabilities.