Recommendation 27

HM Government Rejected

DWP does not currently plan to develop a new self-employment support programme. There is a range of external support available to help claimants move into self-employment or develop existing self-employment. Claimants who are self-employed for the first time are eligible for a 12 month start up period during which work coaches signpost them to national and local support such as business advice, mentoring and training. Self-employed claimants are also eligible for the Government’s small business support funded by the Department for Business and Trade. This includes the Start Up Loans scheme, run by the British Business Bank, which provide loans up to £25,000 to people who may otherwise struggle to get a commercial bank loan as well as 12 months business mentoring; the Business Support Helpline; and Local Growth Hubs in England, alongside Business Wales and Fair Start Scotland, which offer support, advice, and guidance to new and existing businesses. DWP’s Flexible Support Fund can, in certain circumstances, also be used to help claimants move into or develop their self-employment, for example to pay for the upfront costs of childcare or to provide training if there is no existing provision available. The Department for Work and Pensions and Department for Business and Trade are working to increase awareness amongst self-employed disabled people. Claimants who want to become self-employed can also receive support through DWP’s employment support programmes, Restart, the Work and Health Programme and the Intensive Personalised Employment Support (IPES), if they meet the eligibility criteria. Claimants who are over 50 are eligible for additional support from work coaches to help them into work, which could include support to become self-employed or to develop existing self- employment. The Department does not have plans to undertake a final evaluation of the New Enterprise Allowance programme. Conclusion and Recommendation 28 The move from ESF to UKSPF is of significant concern for external support providers. Whilst the Government’s eventual decision to lift the restriction on the use of the UKSPF for people and skills spending is welcome, there is still expected to be disruption due to comparatively less funding under the UKSPF, especially to the services that smaller organisations deliver. This puts services at risk of collapse and will impact the extent of support available to economically inactive people. The Flexible Support Fund (FSF) offers organisations access to a limited amount of funding for delivery of employment support programmes. DWP should expand FSF to help mitigate the loss of essential services for economically inactive people. (Paragraph 170) Response UKSPF is a Department for Levelling Up, Housing and Communities fund. UKSPF provides £2.6 billion of new funding across the UK for local investment by March 2025 and was clearly identified as the key source of local funding to tackle economic inactivity, however it is for lead authorities to determine how UKSPF is best invested locally. Before the restrictions were lifted, lead authorities in England were given flexibility to invest in people and skills interventions in 2022–23 and 2023–24 where the voluntary and community sector were at risk of funding from the European Social Fund ending before 2024–25. The Flexible Support Fund (FSF) is a discretionary fund with a value of £60m per year that jobcentre staff can use to help benefit claimants move into or progress in work or to move closer to the labour market. It is available to local teams to purchase services to tailor support to the needs of individuals and the local area as identified by local jobcentre staff. As such it is not the most appropriate mechanism for supporting economically inactive individuals, many of whom will not be on benefits or in regular contact with Jobcentre Plus and are often supported through voluntary, community and social enterprise organisations which local areas are empowered to fund through their UKSPF allocations. At Spring Budget 2023 we have announced an additional comprehensive package of cross- government support targeted at increasing workforce participation and reducing economic inactivity. This includes investment aimed at groups who are more likely to be or at risk of becoming economically inactive, including those who are long term sick or disabled, parents and over 50s. For example, we have developed the WorkWell Partnerships Programme. This pilot programme will deliver integrated work and health support to disabled people and people with health conditions, who want help to remain in, return to or take up work. Transforming support Conclusion and recommendation 29 The Way to Work campaign focused on moving people into work as quickly as possible, without considering whether this work was suitable or sustainable in the long-term. This approach may reduce unemployment in the short-term, but the long-term positive impacts are not evidenced. It can also