Education and Employment Secretary David Blunkett yesterday pledged to build on the success of New Deal by offering more Government help to 800,000 people who have a long term illness or disability and would like to work.

Mr Blunkett said the Government would be developing plans for introducing rehabilitation and retention pilots to test different ways to help people with a prolonged illness or disability move into, and remain in, work.

Mr Blunkett made these announcements as part of a keynote speech at the Policy Studies Institute,s seminar The Welfare State: The Way Forward, where he set out a modern view of Government and the welfare state based on enabling and supporting people through transition and rapid change.

Mr Blunkett said, "The new welfare state should be a positive driving force in people's lives, not just a safety net. It should be based on enabling people to do things for themselves with the right support rather than creating dependency.

"We have already made substantial progress in getting people off welfare and back to work through the New Deal programmes, but much remains to be done. That is why next year we are establishing a new working age agency that will pull together the Employment Service and parts of the Benefits Agency. This represents a logical extension of the New Deal programmes for those who are unemployed – applying the principle that those who can work are enabled to do so.

"Today there are 2.4 million people who claim Incapacity Benefits. Every week 3,000 people move from work on to benefits designed to help when illness or disability leaves them no option – 90% of whom historically have stayed on benefits and not gone back to work. And on average claimants will stay on sickness and disability benefits for five years.

"The cost to the Exchequer is £6.8 billion a year in Incapacity Benefit and £3.9 billion a year in Income Support for people with a long term illness or disability. Our challenge is to ensure security for those who cannot work and real opportunities for those who can.

The regular Labour Force Surveys tells us that as many as 800,000 people claiming sickness and disability benefit want to work – we need to give practical help to enable as many of these people as possible to have the chance to work again."

Mr Blunkett outlined the Government's measures designed to support those people previously ill or facing disabilities seek work:

• The Government intends to test the effectiveness of helping people when they become ill in work, with job retention and rehabilitation pilots. These pilots, beginning from 2001, will test the effectiveness of early work-focused help with health, employment and other services.
• The replacement of the All Work Test with the Personal Capability Assessment, a medical assessment that identifies what jobs people are able to do. This month PCAs are being extended to 12 areas covering 250,000 incapacity benefit claimants.
• The New Deal for Disabled People will be extended nationally from next April. It has so far helped over 4,700 people move from benefits to work in pilot areas.
• The new Disability Rights Commission is working to eliminate discrimination in employment for disabled people.

Mr Blunkett said, "We are developing and testing real and effective help for people to get and keep work. Once we have that in place we will take a fresh view of the balance of rights and responsibilities encouraging more people with long standing illness or disability who can work to look for a job whilst honouring the pledge of security for those who cannot.

"It is a 'something for something' approach, in which people have an obligation to help themselves where they can. In a world of computers and increasing variety in the nature of work, more opportunities are becoming available for people whose work capacity may be limited by disability or health."

Turning to other sections of his speech Mr Blunkett added that more could be done to make use of people's experience and talents as they enter retirement. He announced that together with the Home Office and the Department of Social Security, he would be looking at how the Government could encourage those approaching and taking retirement to give their time and talents.

Mr Blunkett said, "With the help of employers, we can ensure that the transition between full-time and part-time work and between paid work and volunteering, can be made easier, more flexible, less bureaucratic and of greater value to both the giver and the recipient.

"Possibly through private sponsorship, we could ensure that people moving from work into retirement or semi-retirement receive the necessary information and guidance on what voluntary opportunities exist – for example – reading schemes in schools, family support networks and helping local charities.

"We want to lift people out of dependency. We want to make sure people do not write themselves off. We want to ensure society does not write them off."