A major government drive to get more people back into the jobs market could give recruiters access to a larger and more diverse pool of candidates over the next four years.

The reforms, outlined in a Department for Work and Pensions Green Paper, are designed to cut the number of people on incapacity benefit by one million, help a million older workers back into employment and get over 300,000 lone parents back into the workplace.

The government hopes the measures and the launch of the £360m Pathways to Work fund will boost the employment rate from 74.5% to about 80%.

As a result, recruitment agencies should be able to source much-needed candidates from a wider cross-section of society, from single parents to the over-50s.

John Philpott, chief economist at the Chartered Institute of Personnel and Development said the measures, if successful, could have a major bearing on UK recruitment.

“Given the current scarcity of labour, this announcement is good news. However, recruiters are unlikely to see the main benefits until the beginning of 2010,” he said.

“Furthermore, this new pool of candidates may work in favour of employers, who could then source the labour directly themselves to the detriment of recruiters.”

Tom Hadley, director of external relations at the Recruitment and Employment Confederation, says the focus of the paper is encouraging older people back into work.

“The labour market is unsustainable and we're facing an ageing population. The recruitment industry can play a leading role in this by changing perceptions about older candidates,” said Hadley.

“This will be particularly important in view of age discrimination legislation coming in later this year.”