Businesses, charities, public bodies and other eligible organisations across the UK can apply to the Pathways to Work Innovation Fund. According to Department for Work and Pensions guidance published on 28 September, the scheme will make up to £60 million available over two years to test approaches that could improve employment outcomes and build evidence about what works.
The initiative comes as 2.8 million people remain out of work because of sickness, according to the Birmingham Mail report. The first funding round is intended to support practical ideas ranging from new uses of technology to different services, partnerships and ways for employers to support disabled people and people with long-term health conditions.
First Funding Round Will Provide up to £10 Million
Up to £10 million is available in the first funding round, which opened in September 2026. A further £50 million is expected to become available through a second round opening to bids in early 2027.
According to the DWP’s published guidance, applicants must be based in the UK and can come from the public, private or voluntary sectors. Partnerships and consortia are also included among those able to seek funding.
The department is looking for proposals that test something new or significantly different. Examples include new technology, a new service or delivery model, different forms of partnership working and approaches that help employers support people with disabilities or long-term health conditions.
Existing services will not normally qualify simply because they are being expanded. The guidance says proposals should involve a different approach or create a significant opportunity for learning.
Each project is expected to generate evidence that could improve future services and potentially allow successful approaches to be adopted, replicated or expanded elsewhere.
Work and Pensions Secretary Pat McFadden said the government wanted ideas from businesses, charities and disabled people themselves to help reshape employment support and address the disability employment gap.
Sir Charlie Mayfield, co-chair of the Keep Britain Working programme, said economic inactivity linked to health conditions costs the economy £212 billion a year. He called for new approaches aimed at helping people enter and remain in employment.
Applications Close on 26 October
Applications for the first funding round will be accepted until 26 October 2026. According to the DWP applicant bid pack, organisations must submit an application form together with a milestones and delivery template and a budget template.
The milestones document must explain how the proposal will be delivered, identify key stages and describe how progress will be monitored. The budget template must set out the amount requested and explain how the money would be used to test, develop, implement or evaluate the proposed idea.
An online application portal is due to launch in early October 2026. Until then, applicants can download the application form and submit it by email or post. The fund operates across the UK, with the DWP saying it will work with the Welsh Government, Scottish Government, Northern Ireland Executive and local partners in England.
An advisory panel has also been appointed to help shape the fund and review shortlisted bids. Its members include representatives from employment support, technology, disability organisations and academia, alongside people with lived experience of disability. The department also plans to publish a partnership directory by 5 October 2026 to help organisations and individuals find potential collaborators before submitting their applications.
