Economic Inactivity

Economic inactivity is a key issue affecting the UK’s economy. Around 9 million people are currently estimated to be economically inactive (defined as people of working age not currently looking for work or unable to start work in the next two week period). Tackling economic inactivity was a key theme of the March 2023 budget, which became referred to as the “Back to Work Budget”. It set out a number of measures aimed at increasing workforce participation, particularly among those with long-term health conditions, those over 50 and those with caring responsibilities. However, economic inactivity numbers have continued to increase, with recent media coverage emphasising the high number with long-term health conditions.

The issues that sit under economic inactivity are complex, and often an economically inactive individual will face several barriers at one time to getting back into work. So where should councils and their partners start to focus their work to address this issue?

The importance of a place-based approach

In our 2023 research for the Local Government Association (LGA) and our work to facilitate health and economic inactivity conversations, we found that approaches are most effective when they are place-based, and involve co-ordinating support between agencies. This enables tailored work with individuals and better use of scarce public funds. This type of approach recognises the time needed to diagnose the causes of an individual’s economic inactivity, which are often complex and deep-seated. The key ingredients we identified for success include one to one support, linked to empowering key workers with delegated authority to recommend and signpost clients to the right enabling support. Often it can be effective to wrap employment related support around other local public service touchpoints, such as in health care or with a social landlord. Finally, a vital facet of support is working with employers to help those who find work to settle and retain their roles.

But we know this is easier said than done

We know that offering one-to-one support is expensive, especially in the current climate of limited local funding. We also appreciate that not everyone who is classified as economically inactive needs support. Some people simply do not wish or need to work. Resources should therefore be targeted at ensuring those who want to work, or those who have moved further from the workforce, or have a long-term health condition and associated loss of work confidence, are supported. In order for councils and their partners to successfully signpost and recommend individuals to the right support, they need to know what their key local partners are offering, and what data can be used to find the clients who will benefit most.

Here are some places to start:

  • Creating strong, local partnerships. The complex cause of economic inactivity for many people, mean that addressing it needs to be a shared endeavour. Housing links to health and health links to ability to work. Work can improve confidence and help mental health. Partnership is key for thinking about support provision as a whole around the needs of the customer.
  • Understanding and sharing data. Information sharing about need and about what works is important to help organisations in commissioning together, and also in devising clear support pathways for individuals.
  • The use of tools to identify and help bring needs of target groups to life. In retail, the term “archetypes” is used to embody the qualities and needs of target customer groups. We have applied a similar concept here and created some archetypes to support discussion about what effective targeted support looks like in different cases. Bringing to life the needs of a former shop assistant suffering with osteoarthritis is a means to focus discussion among, for example, staff in DWP, local GPs and employers about finding creative ways to release an individual’s talents back into the workforce.

Interested in joining the discussion?

All these methods aim to create a focus on the needs of individuals and drive challenge and solution about what support is available, what works best, and what’s needed or needs to be changed.

If you would like to know more about the work that we do around economic inactivity and discuss questions about how to focus local action and local partnerships, please join us for our free economic inactivity roundtable discussion on the 23rd of April.  For more information on this roundtable, or if you have any other questions, please email or

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