Keep Britain Working: What the new Workplace Health System Means for Employers and Young People

The Keep Britain Working update, published on 23 September by DWP, DBT and DHSC, sets out plans for a Workplace Health System built on employer standards, workplace health provision and shared intelligence, with an employer data project starting this autumn and a rollout plan ahead of the 2027 Spending Review.

The government has published an update on the Keep Britain Working (KBW) review, setting out how it intends to build what it calls a Workplace Health System to keep more people with health conditions and disabilities in work. The document, Keep Britain Working: a national growth opportunity, was published on 23 September 2026 jointly by the Department for Work and Pensions, the Department for Business and Trade and the Department of Health and Social Care.

It follows ten months of work with Vanguard employers, providers, regional authorities, unions and disabled people since the original KBW review was published in November 2025. The update frames health related economic inactivity as one of the UK’s largest growth opportunities rather than mainly a welfare issue, and states that the approach does not require significant government investment.

The scale of the problem

The update puts the number of people economically inactive because of ill health or disability at around 2.8 million, up around 800,000 since 2019. It estimates the cost at around £212 billion a year, close to 7% of GDP. That figure is made up of £132 billion in lost output, £45 billion in health related benefits, £37 billion in lost output from unpaid carers and £2 billion in additional NHS costs.

The rise has been sharpest at either end of working life. Between 2015 and 2024, the number of people aged 16 to 34 reporting a health condition that limits their work rose by 1.2 million, or 77%, with 530,000 of that increase linked to mental health conditions. Over the same period, the number of people aged 50 to 64 reporting such a condition rose by 0.9 million, or 32%. The disability employment gap stands at 29.4%.

The document argues that the strongest case is for acting before people leave work. Around 300,000 people with a health condition leave work each year. According to the update, someone absent for 4 to 6 weeks has a 96% chance of returning, but after a year fewer than half return. Once someone is economically inactive for health reasons, the chance of them moving into work within a year is 3.8%, compared with 47% for someone who is unemployed. The update estimates that a 1% increase in participation would mean around 330,000 more people in work.

The original KBW modelling estimated annual benefits of £3 billion to £8 billion from an initial set of changes, rising to £9 billion to £18 billion as the system matures. The update describes these as deliberately cautious and says the broader changes now proposed could deliver more. It also cites Health Foundation analysis estimating that returning working age health to 2014 levels could add £57 billion a year in output.

Three components

The proposed Workplace Health System has three parts: better, more inclusive workplaces; better workplace health provision; and better intelligence on workplace health and inclusion.

On workplaces, the British Standards Institution (BSI) has appointed a drafting panel to develop a new employer standard in partnership with KBW. The update lists commitments now being tested with Vanguard employers. These include a work and health conversation within 8 weeks of someone joining, a conversation within 5 working days of an issue being raised, contact on the first day of absence where possible and no later than day 3, and sustained return measured at 6 months rather than on the day someone comes back. The document says these are early examples rather than firm proposals, and that the BSI panel will decide what goes into the final standard.

The update also sets out a draft role for employees under a model of shared responsibility, such as raising concerns early and keeping agreed contact during absence. It says this still needs to be tested with employees, disabled people and trade unions, and states that none of it would be a condition of sick pay, employment or access to support.

On provision, the update proposes a model called Workplace Health Provision. At its centre is an impartial, non clinical coordinator or case manager who helps agree and monitor stay in work and return to work plans. This sits alongside advice and guidance, early support and treatment for common conditions such as mental health and musculoskeletal issues, and aggregated insight for employers. The main open question is how small businesses can afford it. The document points to work already underway, including the Hull Resilience Hub, a buyer’s pool for SMEs run by Hull City Council and Vanguard provider Latus, South Yorkshire Mayoral Combined Authority’s plans to trial shared case managers working part time inside businesses, and West Midlands Combined Authority’s work through the supply chains of large employers in construction and social care.

The update describes intelligence as the engine of the system. It notes that none of the 19,000 employers signed up to Disability Confident can reliably compare themselves with their peers, and that almost no organisation tracks whether people helped back to work are still in work 6 months later. An employer data project will begin in autumn 2026 with large and smaller employers across the private and public sectors. It will start with information employers already hold and will not use named or identifiable employee data.

KBW is also developing a Work and Health Toolkit with the University of Liverpool’s Civic Health Innovation Labs. Under the proposal, individual responses would be private by default and employers would only see aggregated results. The update sets out the proposed functions of a Workplace Health Intelligence Unit, first recommended in the November 2025 review, including common measures, confidential benchmarking, evaluation and public reporting at least once a year.

What comes next

The update sets out five priorities for the next phase: completing and testing the workplace framework, establishing affordable and accessible Workplace Health Provision, making better intelligence deliverable, working with places to develop and scale the system, and preparing a plan for a phased rollout ahead of the 2027 Spending Review.

That plan is expected to cover evidence of what works, how adoption will spread beyond Vanguard organisations, how delivery will work through places and sectors, and any requirement for government investment, which the update expects to be limited.

What it means for FE and skills

The update says the rollout plan will set out how better workplace health support could, over time, benefit young people who are not in education, employment or training, linking to the government’s priorities on disability and young people. Given the rise in mental health conditions among 16 to 34 year olds, this is likely to be the strand of most interest to colleges and training providers working with young people.

One of the composite case studies in the document describes a 23 year old autistic employee who leaves a job within 6 months because no adjustments were agreed, and who is never recorded in his employer’s sickness data because he was never absent. In the proposed system, a work and health conversation 8 weeks after joining leads to adjustments such as written agendas and a named point of contact, and he stays.

The place based work also involves mayoral and strategic authorities, many of which already hold devolved adult skills budgets, and colleges and providers are themselves employers who would fall within the scope of any new standard. The draft standard places weight on equipping line managers to have conversations about work rather than diagnosis.

The full update, Keep Britain Working: a national growth opportunity, September 2026, is available on GOV.UK.