PEOPLE on benefits with little or no prospects of a job are costing Lancashire's economy around £1.33bn per year, a new study has found.

More than 100,000 county residents are on employment support allowance or universal credit and are required to make little or no effort to find work, according to James Farr, managing director of consultants Think UK.

He has been commissioned by Lancashire Economic Partnership to examine the 'economic threat' to the county from such inactivity and has presented his findings to the organisation's skills and employment board.

The inactivity tally is said to be 40 per cent above those seen before the pandemic - and three main areas - Blackburn with Darwen, Preston and Blackpool - are responsible for half of the costs.

This is said to be higher than at any point since 1999 and sees around 900 people each month join the universal credit 'no work requirements' grouping.

In his report to the LEP, Mr Farr concludes: "If all these claimants were in work, Lancashire’s economy would be five to 10 per cent larger than it is now."

His study notes: "Half of all universal credit ‘no work requirements’ claimants in Lancashire are aged under 40.

"Economic inactivity is stereotypically associated with older people but there are around 28,000 Lancashire residents in this group who have at least 25 years before retirement age."

Another issue has been identified with 'fit notes', issued by GPs to cover capability to work.

"Ninety-four per cent of fit notes issued in Lancashire state the patient is not fit for any kind of work (instead of suitable for amended duties)," adds Mr Farr.

"Forty-eight per cent of fit notes are issued for over five weeks. Blackburn with Darwen and Blackpool have the highest number of fit notes issued per head."

Mr Farr has drawn up a list of recommendations to tackle the issue - some involving the Department of Work and Pensions and others aimed at employers, the health services, schools and colleges.

Extra guidance should be given to companies on handling and managing employee ill health, especially mental health issues, he suggests,

Improved access to self-help and advice services, alongside strengthening support to schools and colleges to deal with issues such as low level anxiety are also recommended.

He also advises it would be useful to work with the DWP and employers to develop in-work pilot schemes for sectors prone to high absenteeism, offering face-to-face rather than phone-based support.

For those recently out of work, Mr Farr advocates trialling pathways back into employment, such as offering flexibility around permitted working and earnings, to increase work incentives.

This could involve the DWP and NHS working more closely, sharing claimant data, to ensure a 'better understanding of need'. Financial support could also be garnered from the government's Shared Prosperity Fund to address specific groups.

The study's findings showed that Blackburn with Darwen was second only to Blackpool countywide for universal credit no work requirement claims, with numbers rising year-on-year since 2020. Similar patterns have been observed for Burnley, Hyndburn, Pendle and Rossendale, on smaller scales.