Government Launches £338m Scheme to Support Sick and Disabled People Back into Work

Published: 04 September 2025 | The English Chronicle Desk

The UK government has unveiled a £338 million scheme aimed at helping thousands of sick and disabled people re-enter the workforce, as part of sweeping welfare reforms that officially became law this week. Ministers say the new initiative will provide targeted support to people facing some of the greatest barriers to employment, in an effort to reduce long-term dependency on benefits and encourage greater participation in the labour market.

The announcement came a day after the Universal Credit Act received royal assent, marking the culmination of months of heated parliamentary debate. Work and Pensions Secretary Liz Kendall described the passage of the legislation as a “bumpy ride,” noting that some of its most controversial provisions had been diluted following a Labour backbench revolt. In particular, earlier proposals to tighten eligibility for Personal Independence Payment (Pip) were scrapped, with a review of the benefit now under way under the leadership of Disability Minister Sir Stephen Timms.

Under the new law, the universal credit standard allowance will rise at least in line with inflation until the end of the 2029/30 financial year. However, significant changes are also being introduced to the health component of the benefit. From April 2026, new claimants who do not have a severe or terminal condition will see their support reduced, and this rate will be frozen until 2030. Critics argue this will place vulnerable groups under financial strain, while the government insists it is necessary to encourage employment among those who are able to work.

The centrepiece of Thursday’s announcement is the £338 million “connect to work” programme. Designed to run across 15 regions of England, including London, South Yorkshire, and Greater Essex, it will provide personalised employment support to an estimated 85,000 people with health conditions, disabilities, or other complex barriers. The Department for Work and Pensions (DWP) said participants will receive tailored coaching from employment specialists, job-matching services, and ongoing support once in work. Referrals will be made by healthcare professionals, local authorities, voluntary organisations, or through self-referral.

Over the course of five years, the government expects the scheme to reach around 300,000 people across England and Wales. Officials argue this investment demonstrates a commitment to both reducing welfare dependency and addressing labour shortages by enabling more people to contribute to the economy.

Kendall, defending the reforms, emphasised the importance of addressing the dual challenge of poor health and unemployment. “For too long, millions of people have been denied the support they need to get back to health and back to work,” she said. “This investment will help ensure that no one is written off, and that people with the desire and ability to work have the chance to do so with the right support in place.”

The government’s move has been welcomed by some employers’ groups who see it as an opportunity to tackle staff shortages and broaden the labour pool. However, campaigners for disability rights remain cautious. While they acknowledge the benefits of tailored support, concerns persist about the impact of reduced financial assistance for those unable to work and the risk that vulnerable individuals may feel pressured into unsuitable jobs.

As the welfare reforms are rolled out, ministers face the challenge of balancing fiscal responsibility with compassion for the country’s most vulnerable. The success of the £338 million programme will be closely watched as a test of whether the government can truly deliver on its promise to provide a pathway from welfare to work.