Back To Work Bonds

The rising cost of unemployment support has been widely reported, yet the UK government appears unable to bring it under control.

We need an approach that gets people back into work without requiring the taxpayer to foot the bill for failure.

Enter Back to Work Bonds, a new model where private employment agencies earn money by successfully getting unemployed people into jobs.

Each agency would act as an intermediary, posting a £1,000 bond per unemployed person and covering all support costs to get them to go back to work. In return, they would receive 100% of the income tax paid by those individuals for the next ten years.

This model creates zero upfront cost or risk to the taxpayer. The state only pays out of future tax revenue that wouldn’t exist without the scheme, while saving on welfare and benefiting from higher consumer spending to help grow the economy.

The model also introduces non-linear returns: instead of a flat fee per person, agencies earn more by helping individuals into higher-paying jobs—creating powerful incentives to upskill and support people into better work.

For example, if one agent in an agency helps 50 people into minimum-wage jobs, the income tax generated could exceed £100,000 annually. At median wages, that figure could double—making the potential returns substantial.

And if agencies fail? The government still retains the £1,000 bond per person, leaving the state better off.

A trial involving 1,000 unemployed people could refine the model, ensure safeguards, and assess fraud risks. Once proven, it could scale rapidly; with over one and a half million unemployed people in the UK, there is a massive financial incentive for these new employment agencies.

It would also shed light on the real barriers to employment, such as mental health, skills, and the costs of childcare, and inform policy reforms to remove them quickly and effectively to get people back into work, including ensuring that work pays better than unemployment.

This is a moonshot approach to welfare: targeting a clear, ambitious goal and achieving it through speed, innovation, and external investment, providing a better alternative to an area of clear government failure.

It would also drive wider innovation in areas like low-cost digital education, remote work, and AI mental health support, benefiting not just the unemployed, but the entire workforce.

The current welfare system is broken.

But like the Japanese art of Kintsugi, which repairs cracks in objects with gold, Back to Work Bonds could turn a fractured system into something stronger and more valuable than before.