Responding to the new Labour market overview September 2024 released by the Office for National Statistics, Ben Harrison, Director of the Work Foundation at Lancaster University said:

“Today’s figures reveal that while some UK labour market indicators are improving, 2.79 million working-age people remain sidelined from the workforce due to long-term sickness, leaving employment levels at 74.8% – lower than a year ago, and a long way short of the Government’s target of 80%.

‘The greatest employment challenge for a generation’

“Unemployment has fallen slightly to 4.1% but economic inactivity due to ill-health remains stubbornly high at 2.79 million. And the reality is that the longer people are out of work, the harder it is for them to get back.

“Liz Kendall and the Government have this morning described this as ‘the greatest employment challenge for a generation’, but their plans to get Britain working are not quick fixes. They require a re-wiring of the welfare offer by overhauling the punitive culture of Jobcentres, improving public services and creating new relationships with local leaders to open up opportunities.

“While plans to get people back to work bed in, the Government must also work with employers to stem the flow of people leaving the labour market. Over 73,000 people have left the labour market in the last year due to long-term sickness – on average 200 people per day – and employers must be empowered to re-design job roles and provide flexibility around existing health conditions to help workers stay in sustained employment.

Workers continue to see wages rise

“The real value of workers’ wages increased strongly by 2.2% on the year, despite pay growth easing. There has been a 14-month period of growth following the worst of the cost-of-living crisis, however, pay growth has been uneven across sectors. The public sector and manufacturing are currently seeing the strongest growth while pay growth is lagging behind in construction.”