The government has announced a new Pathways to Work Innovation Fund, inviting businesses, charities, public bodies and technology organisations to compete for up to GBP60 million for new ways to support disabled people and people with health conditions into work.
The Department for Work and Pensions says the fund will open for bids in September and will back fresh approaches to employment support across the UK. It forms part of a wider GBP3.5 billion employment support package, with ministers pointing to the scale of economic inactivity linked to ill health and the need for more personalised support.
For small businesses, this is not simply another Westminster announcement. It may create a practical opportunity for training providers, workplace technology firms, local employers, recruiters, charities and community organisations that can show they understand the real barriers people face when trying to enter, return to, or stay in work.
What has been announced?
The Pathways to Work Innovation Fund is being positioned as a call for ambitious and creative ideas from the private, voluntary and public sectors. The government says it wants proposals that can test genuinely new approaches to helping disabled people and those with health conditions move closer to work, find roles, and remain in employment.
An expert panel, including Paralympian Tanni, Baroness Grey-Thompson, will help shape the fund and advise on which bids should receive support. The DWP has also said that disabled people’s voices and experience should sit at the centre of the process.
The department is linking the fund to wider changes in work and health support, including specialist advisers in communities and more joined-up help. It has also referenced innovation in public services, including the use of technology, AI and machine learning, although bidders should avoid treating technology as a shortcut for understanding workplace needs.
Why it matters to smaller firms
Many SMEs already see the workforce challenge from both sides. They need reliable recruitment pipelines and practical staff support, but they often lack the HR teams, occupational health budgets and specialist systems available to larger employers. A well-designed local project could help smaller employers improve job design, onboarding, reasonable adjustments, training, confidence and retention.
The fund could also matter to small suppliers. A digital inclusion company, local college, disability employment charity, HR consultancy, assistive technology provider or sector-specific training firm may be able to build a credible partnership around a defined problem. The key will be showing that the idea is not generic, not just a repackaged service, and not dependent on vague claims about productivity or social value.
For SMEs interested in bidding, the September opening leaves a short preparation window. Waiting for the full prospectus may be too late to pull together partners, evidence and a realistic delivery model.
What to prepare now
Start with the problem, not the funding. A stronger bid is likely to explain a specific barrier: for example, a lack of suitable entry routes into a sector, poor job matching, patchy line-manager confidence, inaccessible training, transport constraints, fluctuating health conditions, or support that disappears once someone starts work.
Next, identify who needs to be in the partnership. A small employer may bring real vacancies and workplace insight, while a charity or supported employment provider may bring lived experience and specialist support. A training provider may bring delivery capacity. A technology business may bring tools, but should be able to show how those tools will be used safely and practically.
Evidence will matter. SMEs should gather examples of recruitment gaps, retention challenges, sickness absence patterns, training needs, staff feedback or local labour-market issues. That does not mean publishing sensitive information, but it does mean being able to explain why the proposal is needed and how success will be measured.
It is also worth thinking about scale from the beginning. Innovation funds often favour ideas that can be tested properly and then repeated elsewhere if they work. A small pilot can still be credible if it has clear learning goals, realistic costs, strong safeguards and a route to wider use.
Questions for SME partners
Before committing time to a bid, small firms should ask a few blunt questions. What would be different for participants, employers and support providers at the end of the project? Who is responsible for delivery? How will disabled people and people with health conditions shape the design? What support continues after someone starts work? What data will be collected, and how will privacy be protected?
The fund is also a reminder that inclusive employment is not only a compliance issue. For many smaller firms, it is part of solving recruitment shortages, retaining experienced staff, widening the talent pool and building workplaces that can adapt when people’s circumstances change.
The practical step now is to watch for the September bidding details, speak to likely local partners, and shape a proposal around a real employment barrier rather than a broad ambition. For SMEs with a strong idea and the right collaborators, this could be a useful route to test support that ordinary commercial budgets would not cover.
Source
Department for Work and Pensions: GBP60 million fund launched to transform employment support
