The UK must tackle long-term sickness if it wants to bolster its workforce and grow the economy, said the British Chamber of Commerce.
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The British Chamber of Commerce is calling on the UK government to boost productivity by supporting individuals in ill health to return to employment. At a time when Treasury finances are stretched, long-term sickness is costing the state an estimated £130 billion (€149bn) in lost output.
In a report released this week, the BCC noted that “around 7% of the UK workforce, almost 2.8 million people, is currently out of work due to long-term sickness, whereas the equivalent figure in Japan is just 3.5%”.
The prominent business lobby said that boosting workforce participation could be a way to re-energise Britain’s sluggish GDP, a key mission of the current Labour government.
“If the government is serious about growth, then we must turn the tide on this loss of talent. The evidence is also clear that being in work is good for health,” said Shevaun Haviland, director general of the British Chambers of Commerce.
Tools to improve participation
Economic inactivity linked to ill health has increased since the pandemic, and an estimated 300,000 people in the UK leave their jobs each year because of health conditions.
Employers are keen to tackle this problem, said the BCC, although increasing costs and the complexity of support systems are hindering their efforts — especially for SMEs.
The lobby group noted that young people are particularly susceptible to mental health problems that restrict their ability to work, partly linked to social restrictions during the pandemic. In the period from April to June, around 12.8% of people aged 16 to 24 years in the UK were not in education, employment or training. That total isn’t, however, purely composed of those who are economically inactive because of health problems.
In order to boost workforce participation, the BCC is encouraging the UK government to introduce a wage subsidy scheme, specifically for young people aged 16 to 24 with a health condition. The state would pay a portion of the individual’s wage, encouraging employers to hire from this group.
Aside from this proposal, the BCC wants improved access to mental health and neurodiversity training, as well as tax breaks for health services that businesses provide for their workers.
Another key proposal involves reform of the fit note system, which provides employers with evidence that a staff member is unfit to work.
Employers are often reluctant to question fit notes, meaning they may miss opportunities to help employees back to work, said the BCC. It suggests that advice should be given to businesses on what staff members are and aren’t capable of, allowing for the continuation of lighter or altered duties in some cases.
Boosting growth and curbing spending
“Fundamentally, if the UK economy is to improve productivity, it needs employers and the government to work together to ensure that workers are healthy and productive,” said David Spencer, professor of economics at the Leeds University Business School.
“The idea of employers working in partnerships seems important as the causes of sickness are complex and require a multiagency approach,” he added.
The report from the BCC comes ahead of November’s Autumn Statement in the UK, where chancellor of the exchequer Rachel Reeves will outline her spending plans for the year ahead.
Lawmakers will be looking for ways to foster growth while simultaneously trimming spending, hoping to alleviate pressure on the public finances.
This comes after the government was forced to water down a controversial welfare bill, intended to generate net savings of £5bn (€5.7bn) a year by 2030.
“Long-term sickness is a big productivity issue and with an ageing workforce, it will become increasingly so,” Anthony Rafferty, professor in employment studies at the Alliance Manchester Business School, told Euronews.
“A focus not just on large but SMEs is warranted. Often employees in such organisations have less access to occupational health services or policy and practice are more informal and less developed, and thereby more shaped by line manager discretion.”
Failing to tackle long-term sickness “can be a considerable cause of the loss of talent and human capital for organisations”, he concluded.
