Government Work Scheme Delivers Almost 100,000 Placements Highlighting Britain's New Approach To Welfare

28th April 2024

Almost 100,000 workplace training places have been delivered in the past year for jobseekers, smashing the Government's 80,000 annual target, new data has revealed.

Record number of workplace training places have been delivered this year helping boost jobseeker skills and the economy.

Significant milestone hit as Prime Minister sets out welfare reforms to jumpstart UK labour market.

DWP working directly with businesses to hire work-ready Brits and reduce dependence on foreign labour .

Comes in week that NICs cuts worth £900 hit pay packets ensuring work pays. However fiscal Drag or the Stealth Tax Will outstrip this over the years. (See further down this page)

Part of the Government's plan to help people back to work and grow the economy, Sector-based Work Academy Programmes (SWAPs) help benefit claimants move off welfare and into work by providing tailored training and work experience before a guaranteed job interview. Businesses who are actively hiring help craft these six-weeks on-the-job programmes, so that participants gain the right experience and skills for their roles.

The latest figures published this week show that in the last year 98,710 places were delivered - the highest annual figure yet. It brings the total number of SWAP starts to 283,930 - in sectors ranging from coding to hospitality, construction, health and social care.

It comes in the week that the Government's NICs cuts worth £900 to the average worker hits pay packets as part of the plan to cut taxes, grow the economy and build a brighter future for hard-working families.

Backed by industry giants such as UKHospitality, the British Chamber of Commerce and Business in the Community, alongside household brands like Amazon, JD Sports and Lidl, jobseekers leave SWAPs work ready as they apply for live job roles.

The milestone follows the Government's bold new vision for welfare, with the Prime Minister outlining reforms to tackle inactivity as we give more Brits the skills and support to get back into work as we bring down migration levels.

Secretary of State for Work & Pensions, Mel Stride MP said, "Our Jobcentres are a proven route to changing lives through work and the learning and upskilling opportunities they provide are second to none.

As part of our plan to build our new welfare settlement for Britain and grow the economy, this major milestone helps people get on with the skills they need to secure a great job, a higher wage, and a brighter future for their family.

After the Prime Minister announced the accelerated rollout of Universal Credit last week, together with increases to the Administrative Earnings Threshold (AET), even more claimants will benefit from the dedicated employment support offered through our Jobcentres.

This includes all the programmes under the Department for Work and Pensions' (DWP) £2.5bn Back to Work Plan, which is set to help over a million people, including those with long-term health conditions to break down barriers to work.

Keith, 47, from St Austell was looking to change careers after he finished a previous role.

Keith said, "I was very interested in getting into Mental Health Care, but I had no qualifications or experience in the area. My Work Coach Tom was really supportive and told me how I could get experience in the sector through a SWAP with the NHS.

The SWAP opened my eyes to the type of roles available within the NHS and gave me the confidence I needed to kickstart my new career. I’m now working as a Developmental Mental Health Assistant and cannot believe I’ve reached my dream of working in Mental Health so quickly with the help of SWAPs.

Whether it’s someone’s first job or a career change, jobseekers of any age and experience can access invaluable work experience through SWAPs for a role actively being recruited for.

Andrew Bush, CPO of Greene King, said, "We were really pleased to be part of the sector-based work academy in partnership with the Department for Work and Pensions and other hospitality employers.

Through collaboration, we were able to create a programme that gave candidates a greater insight into our exciting industry, providing opportunities for many to achieve a fulfilling career in hospitality.

The Government is taking the long-term decisions to ensure the resilience of the UK’s labour market, building a strong economy where hard work is rewarded and where everyone has a brighter future.

Alexandra Hall-Chen, Principal Advisor for Employment and Skills with the Institute of Directors said, "At a time when many businesses are struggling to recruit the skills they need, SWAPs provide a valuable means by which employers can tap into a wider pool of candidates.

By providing jobseekers with support and training targeted at key sectors, SWAPs are a key tool in tackling both skills shortages and barriers to employment.

Fiscal Drag - Freeze on Personal Allowances
Fiscal drag is usually discussed in the context of the freeze in the personal allowance and higher rate threshold. These were last uplifted in April 2022, when the personal allowance increased from £12,500 to £12,570 and the higher rate threshold increased from £50,000 to £50,270. These very modest increases were based on the then, much lower, Consumer Price Index (CPI) figures of 0.5% from September 2020.

The announcement that income tax thresholds would be frozen was actually made the year before in the 2021 Spring Budget. The then Chancellor Rishi Sunak announced that after the modest April 2022 increase, income tax thresholds would be held for four years until 2025-26. The intention was this freezing would be one of the measures to help the country balance the books after significant expenditure during the Covid-19 pandemic, while avoiding increasing tax rates directly. The latter course would have inevitably attracted hissing from some quarters. At the time, the measure was projected to bring in an extra £8bn a year by 2025/26.

In the 2022 Autumn Statement, Chancellor Jeremy Hunt extended the freeze by another two years to April 2028. Combined with similar NIC threshold freezes, the Office for Budget Responsibility (OBR) projected that these measures would bring in an extra £42.9m by 2027/28.

Default position
The freezes go against the default approach of increasing certain thresholds annually based on inflation, a process called ‘uprating’. With uprating, allowances such as the personal allowance are increased by the CPI each year.

The uprating of certain tax thresholds was originally introduced in the Finance Act 1977 with cross party support. Although it does not apply to all thresholds, it is a useful way of ensuring tax allowances keep track of the ‘real’ value of money.

A stealth tax
The shorthand approach to explaining fiscal drag is to focus on the effect for those crossing thresholds. The logic is that as wages rise over time, while rates are frozen, more people will start to earn more than the personal allowance and come into basic rate tax, while others are ‘dragged’ into higher rate taxes.

A point that is often missed is that the effect is still noticeable even if you don’t cross a threshold. A rate change is easy to see on a payslip, but a frozen threshold is not. To ‘see’ fiscal drag, it is necessary to look at your income tax as a percentage of total salary for one tax year and compare to the next. As long as your earnings are increasing, even if you don’t cross a threshold, over time thanks to fiscal drag your tax contribution will increase.

Had the government moved the personal allowance in line with inflation, the personal allowance would currently be £14,270 and higher rate of tax would begin at £57,170.

Many more pensioners are being dragged into paying tax for the first time and this will rise for as long as personal allowances are frozen.

Pensioners do not pay national insurance so they do not gain from the reduction in national insurance. But they do have the triple lock in place for payments of their pensions.