The Department for Work and Pensions has opened the first round of a £60 million fund to test new ways of helping disabled people and people with long-term health conditions into work and keeping them there, with up to £10 million available in grants. Applications for the Pathways to Work Innovation Fund close on 26 October 2026. The scheme sits within the Government's £3.5 billion Pathways to Work programme and was announced by the Work and Pensions Secretary, Pat McFadden, on 14 July.

The problem it addresses has clear links to health. Office for National Statistics figures show that about 2.8 million working-age people in the UK are economically inactive because of long-term sickness, some 700,000 more than in 2019. The Learning and Work Institute estimates that closing the disability employment gap would put an extra 2.4 million people into work. Data from the Office for Health Improvement and Disparities show that 5.7 per cent of working-age people in England were economically inactive in 2024 to 2025 because of long-term illness or disability. The rate was 8.6 per cent in the North East and 4.1 per cent in the South East, and the office publishes the figures as an indicator of the wider determinants of health.

The fund has two stated aims. One is to help people reach and keep work. The other is to build evidence about what works and for whom. The department says that evidence should help narrow the disability employment gap and contribute to what it calls a more joined-up system of employment, health and skills support. An advisory panel that includes people with lived experience of disability will review shortlisted bids, and a second round of up to £50 million is expected to open early in 2027.

The guidance does not name the NHS as a partner or set out a role for GP practices, mental health services or occupational health. Even so, the people the fund targets are patients of those services, and any scheme that joins up health and employment support would need to work with them. Public sector bodies are eligible to apply, so NHS organisations could bid alone or in partnership, although the guidance does not mention them by name. Proposals that help employers support disabled staff are in scope, as are new uses of technology, new services and new partnerships. The department says strong bids will show how accessibility and inclusion shaped their design.

Health is a devolved responsibility, and the fund is UK-wide. The department says it will work with the devolved governments and with local partners in England so that findings can benefit people across the country.

Grants can pay for new technology, including AI tools, and for pilots of new products and services, as well as the specialist support needed to deliver them. Projects must be delivered within 12 months of signing the funding agreement. Proposals will be judged on how innovative they are, how likely they are to improve outcomes, how far they can be scaled and whether they offer value for money. The department says it will not fund existing services that are delivered without a significantly different approach.

Shortlisting outcomes are due on 9 November, with refinement sessions between 16 and 27 November and refined bids due by 4 December. Awards are expected from January 2027, and projects should mobilise from February 2027. Because delivery is limited to 12 months, evidence from this first round is unlikely to be available to health and employment policy makers before 2028. Full details are on the gov.uk website.

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