Recipients of benefits under the UK’s flagship welfare scheme will be required to broaden their search for work within weeks of receiving government allowances or face sanctions.
As the UK grapples with an acute labor shortage, those able to work will be expected to search for jobs that go beyond their former occupation from the fourth week of their claim, instead of three months.
Those who do not comply with the new rules, which come into effect on Thursday, will have their benefits cut in line with the current regime.
Officials said the “Way to Work” program aimed to get 500,000 benefit claimants into jobs by the end of June. It will target those in the “intensive work search group”, who are able to work but are either unemployed or on low wages.
They added that jobseekers would receive more support to find jobs, including face-to-face time with a work coach.
Employers in almost all sectors are complaining of labor shortages that show little sign of easing, with more than a third of businesses surveyed by the Recruitment & Employment Confederation saying that finding staff was one of their biggest challenges.
The latest official data showed that vacancies rose to a record high of 1,247m in the three months to December, equivalent to four in every 100 employee jobs in the economy, with a quarter of a million posts unfilled in health and social care alone.
But this is not because there are large numbers of unemployed people struggling to find a suitable post. The unemployment rate, at 4.1 per cent, has fallen almost back to its pre-pandemic level, with the ratio of unemployed people to vacancies at a record low of just 1.1.
The shortages have instead been driven by surging demand for staff in some sectors, lower inward migration, and a significant increase in the number of people who have dropped out of the workforce – whether for health reasons, to retire earlier, or to pursue their education .
Thérèse Coffey, work and pensions secretary, said: “As we emerge from Covid, we are going to tackle supply challenges and support the continued economic recovery by getting people into work.
“Our new approach will help claimants get quickly back into the world of work while helping employers get the people they and the economy needs.”
Tony Wilson, director of the Institute for Employment Studies, said requiring jobseekers to broaden their search at an earlier stage would make very little difference either to the number of benefits claimants, or to employers’ ability to fill vacancies because the numbers affected were too small .
“We have a full-blown recruitment crisis and a participation crisis. . . There are a million fewer people in the labor market than on pre-pandemic trends. We have massive problems we need to fix, ”he said.
But while some 3m people are out of work and claiming universal credit, most of them have health issues or caring responsibilities that prevent them working, and have already been on benefits for more than a year.
Only about 130,000 jobseekers have been claiming universal credit for less than three months, straining the plausibility of Coffey’s claim that the new measure will help move half a million people into jobs.
“The numbers just do not stack up,” Wilson said.
Graeme Cooke, director of evidence and policy at the Joseph Rowntree Foundation, said the new measure was based on a “complete misdiagnosis of the problem”, since there were very few people in short-term unemployment – and rapidly rising numbers dropping out of the labor market, most of whom received no support.