The Government could save upwards of £20 billion and support more than 220,000 people back into employment through return-to-work schemes, according to new analysis by researchers from The University of Manchester, Newcastle and Glasgow.
The report models the potential effectiveness of the Government's 'Getting Britain Working' programmes, showing these savings could be made by the end of this Parliament in 2029 if just 5% of out-of-work people in receipt of Universal Credit returned to work.
The report estimates that:
- Getting 5% of unemployed under-25s back into work would save £903 million.
- Getting 5% of under-25s workless due to sickness or disability back into work would save £631 million.
- Getting 5% of unemployed over-25s back into work would save £6.67 billion.
- Getting 5% of over-25s workless due to sickness or disability back into work would save £11.9 billion.
The 5% estimate is based on what happened with the similar New Deal initiatives that happened in the UK in the 2000s. Savings would be made in the form of both reduced benefits spending and increases in tax and national insurance revenue.
The costs to Government of assisting this number of people back into, and helping them stay in, employment could be between £1.5 to £1.9 billion. So that within just two years, the Government could save almost £10bn, meaning every £1 invested in employment support programmes could return between £5.21 and £6.63.
Currently, more than five million people in the UK are out of work and in receipt of Universal Credit - including almost one million people aged 18-24 years who are not in education, employment or training (NEETs). 1 in 5 of these young people receive health-related benefits largely for mental health conditions. Ill-health related economic inactivity accounts for over three million claims and is particularly concentrated in the most deprived and deindustrialised areas. As of May 2025, the average household on Universal Credit received £961.63 per month in England.
The report was commissioned and funded by the Work and Pensions Select Committee and produced by Health Equity North with academics from Newcastle University, The University of Manchester, University of Liverpool, and University of Glasgow.
The UK government has introduced several return-to-work initiatives over the last 12 months as part of its desire to 'Get Britain Working'. This includes:
- Creating a new Jobs and Careers Service by merging Jobcentre Plus and the National Careers Service
- Establishing eight "Trailblazer" areas that receive funding to test local partnerships between the NHS, councils, colleges, and employers
- A Connect to Work programme providing rapid job-matching, training, and in-work coaching
- Embedding employment advisers in mental health and musculoskeletal services, with expanded Individual Placement and Support provision.
- Launching a new Primary Care pilot will enable GPs to directly refer patients for employment support.
- Launching proposals for the Employment Rights Bill and the NHS 10-Year Plan's, which focus on prevention will further reduce ill health among working-age people.
- The Youth Guarantee for NEETS, which ensures access to apprenticeships, training, education, and tailored job support - including paid work placements for those out of work for more than 18 months.
These schemes replicate previous New Labour successes of the 'New Deal' return to work programmes which, between 1997 and 2010, saw a spike in employment across all age groups. This saved up to £2,500 per New Deal participant, with 46% gaining a job and 27% sustaining employment that lasted six months or more.
The report has been submitted as evidence to the Government's Work and Pensions Select Committee, which looks into the policies and spending of the DWP, including benefits for people both in and out of work.
Debbie Abrahams, MP for Oldham East and Saddleworth and Chair of the Work and Pensions Select Committee, said: : "After more than a decade of austerity-driven policies - further compounded by the COVID-19 pandemic - levels of ill health and health inequalities have deteriorated across the UK, but particularly especially in deprived areas. As a result, the country now faces significantly higher rates of economic inactivity due to ill health compared with similar economies such as Germany, Sweden, and France. This poses a major economic challenge, contributing to stagnant growth, widening productivity gaps, and increasing poverty and health inequalities. In the past we have seen the value of supportive welfare-to-work programmes, such as the New Deal for Disabled People and New Deal for Young People, which addressed the needs of the whole person in helping them to get into work. It's imperative that these Government 'Trailblazer' schemes are ramped up - if we can get even a small proportion of the out-of-work population working again, we will see extraordinary gains, not only fiscally, but for these individuals, their families and across communities, workplaces, and public services alike."
Professor Clare Bambra, Academic Co-director of Health Equity North and Professor of Public Health at Newcastle University, said: "Constituencies such as East Marsh and Port, Grimsby, Central Easterhouse, Glasgow and Birkenhead Central have around 30% of the working-age population receiving ill health-related welfare benefits. In these areas, life expectancy is 12 years less than the national average. This stark inequality reflects the deep connections between health, work, and place - where decades of industrial decline and underinvestment have left communities struggling with poor health, limited opportunities, and persistent economic disadvantage.
"By embedding employment support within health services and targeting investment where ill health and unemployment overlap, we have a real opportunity to break this cycle. Helping even a small proportion of people in these areas back into good, secure work could have transformative effects - not just for the government and local economies, but for people's health, wellbeing, and prosperity."
Dr Luke Munford, Academic Co-director of Health Equity North and Senior Lecturer in Health Economics at The University of Manchester, said: "When people are supported to stay healthy, skilled, and connected to good jobs, everyone benefits - be it individuals, families, businesses or the economy as a whole. This report highlights the value of investing in people's health and employability. Even modest improvements in getting people back into the workplace could deliver billions in savings by the end of the decade. These findings show that the Government's efforts to integrate and embed health and employment can be a huge step towards the economic recovery of the UK."
Dr Andy Baxter, Research Associate at the University of Glasgow, said: "Employment is one of the strongest determinants of health. When people are in good, secure work, they're less likely to experience long-term illness, more likely to engage with preventive healthcare, and more connected to their communities. Reducing economic inactivity through health-focused employment programmes provides stability, purpose, and the foundation for healthier, fairer futures. Effective back-to-work schemes are crucial in rebuilding a Britain that is healthy and prosperous, and our research shows that the return on investment potential is huge."
Hannah Davies, Executive Director of Health Equity North, said: "We've seen in the past that well-designed back-to-work schemes can transform lives and deliver real results for both people and the economy. But this time, it needs to be right from the very start - ensuring programmes are properly funded, evidence-based, and tailored to the needs of local communities. If the Government can combine effective employment support with investment in health, skills, and opportunity, they have a genuine chance to break the cycle of long-term unemployment and ill health once and for all."
Read the full analysis 'Estimating the savings and financial benefits to the UK government of return-to-work for people in receipt of Universal Credit' here: https://www.healthequitynorth.co.uk/app/uploads/RTW-REPORT-FINAL-1.pdf
