Ministers are urged to integrate NHS services into job centres to tap into a hidden workforce of about 3 million economically inactive people, a report finds.
The research is described as the most comprehensive study of long-term unemployment.
It suggests traditional methods focusing on benefit sanctions have been ineffective.
Instead, it advocates for personalised support based on health needs.
The Pathway to Work Commission report recommends local NHS integrated care boards collaborate with regional mayors to assist people in returning to work.
“The country cannot afford to have a whole generation of young people consigned to a life devoid of both work and hope”
It shows a major portion of the economically inactive population, about 2.8 million across the UK, are unable to work due to long-term health issues—both physical and mental.
The study is led by Alan Milburn, former health secretary under Tony Blair.
It draws on evidence from over 700 people in Barnsley, South Yorkshire.
It includes insights from employers and experts.
The research says the current jobs and benefits system, which primarily targets job seekers with sanctions, fails to address the larger group who are inactive due to health problems.
Need Career Advice? Get employment skills advice at all levels of your career
Milburn said: “The one-stick benefits sanctions approach of recent years has failed.
“The previous government pointed public policy ammunition at the wrong target.
“Unsurprisingly they kept missing.
“With a new government in place and inactivity rates that show no sign of slowing down, this is the moment for a fundamental change in direction.
“The country cannot afford to have a whole generation of young people consigned to a life devoid of both work and hope.”
The report aligns with broader government priorities, including recent efforts by Labour to improve the skills system.
Keir Starmer and Education Secretary Bridget Phillipson will launch Skills England, an initiative to unify skills training with job market needs.
Richard Pennycook, former CEO of the Co-operative Group, will serve as interim chair of the new body.
