Britain Faces Economic Strain as Sickness Absence Costs Soar to £85 Billion
LONDON – A new report reveals Britain is facing a potential economic crisis fueled by a dramatic rise in sickness-related worklessness, with the cost to the economy estimated at £85 billion annually. The findings, prompting government action, highlight a “culture of fear” and lack of support for employees struggling with health issues, hindering their ability to remain in or return to work.
The report details a critically importent increase in economic inactivity, currently trending negatively, driven by long-term illness. Loz, a disabled campaigner, emphasized the lost potential, stating, “It’s a shame because they’re missing out on so many fantastic disabled people that can do fabulous jobs.” She also acknowledged the need for employer support, adding, “There are things that can be put in place to help employers, help save people.”
In response, the government has launched a partnership with over 60 major companies – including Tesco, Google UK, Nando’s, and John Lewis – to address the issue.Over the next three years, these companies will “develop and refine workplace health approaches” aimed at reducing sickness absence, improving return-to-work rates, and increasing disability employment rates. The initiative aims to establish a voluntary certified standard by 2029.
Work and Pensions Secretary Pat McFadden described the partnership as a “win-win for employees and employers as its’ aimed at keeping people with sickness issues or developing disability issues in work.” He added, “That’s in the interests of employers because these are good experienced staff and it’s in the interests of employees too because most people want to stay in work if they possibly can.”
ruth Curtice, chief executive of the Resolution Foundation think tank, stated the review “has accurately identified a culture of fear, a dearth of support and structural barriers to work as key challenges to overcome in turning the tide for Britain’s economic inactivity problem.”
The CIPD, representing HR professionals, welcomed the preventative approach but cautioned that the report’s success “will depend on the extent to which these recommendations are understood by buisness in driving positive outcomes and backed by policy makers at a national and regional level,” according to its chief executive Peter Cheese.
The announcement comes as the government progresses with its Employment Rights Bill, which has drawn criticism from some businesses who fear it will stifle growth. The bill proposes a right to guaranteed hours and stricter regulations on zero-hour contracts. Additionally, Chancellor Rachel Reeves is proposing a scheme to guarantee paid work for young people unemployed for 18 months, with potential benefit sanctions for non-compliance.
