Introduction to Economic Inactivity
The number of sick and disabled people out of work puts the UK at risk of a “crisis of economic inactivity”, threatening the country’s prosperity. According to a report by former John Lewis boss Sir Charlie Mayfield, 800,000 more people are currently unemployed for health reasons than in 2019, costing employers £85 billion a year.
The Problem of Economic Inactivity
The problem could get worse without intervention but Sir Charlie, who will lead a taskforce to help people return to work, said this was “not inevitable”. The report, commissioned by the Department for Work and Pensions but prepared independently, found that one in five working-age people were unemployed and not looking for work. Without intervention, an additional 600,000 people could quit work for health reasons by the end of the decade.
Causes of Economic Inactivity
Sir Charlie said illness cost employers £85 billion a year through issues such as lost productivity and sick pay, but it also cost the wider economy. “Work is generally good for health and health is good for work,” he said. The increase in cases of the disease was due to a "surge" in mental health problems among young people and musculoskeletal problems, aches and pains in the joints among older people, causing them to give up work.
Consequences of Economic Inactivity
“For employers, illness and staff turnover mean disruption, cost and lost experience,” he said. “For the country this means weaker growth, higher social spending and greater pressure on the NHS.” The government spends £212 billion a year on sickness-related inactivity, equivalent to almost 70% of income tax, through lost production, increased benefits and additional burdens on the NHS.
Solutions to Economic Inactivity
People could be encouraged to stay in work if health was seen as "a shared responsibility between employers, workers and health services", he said. Sir Charlie added that his taskforce would work with GPs who say it is difficult for them to assess whether a person is fit to work or not when ill, but are asked by patients to write sick notes.
Employer Support
The report comes as the government seeks to push forward its employment rights bill. Some companies say this will slow growth. Retailers understand the importance of supportive workplaces, but the government’s objectives and its policies, such as the Workers’ Rights Act, were "in conflict with each other".
Personal Stories
Loz Sandom has mental and physical problems that make it difficult to find a job, and the last time they worked was a year ago. "I’m willing to do the work and that’s what I want. I want to get a job," said the 28-year-old, who has a degree in illustration and previously worked as a digital marketing executive. With support from the charity Scope, Loz is looking for an employer willing to facilitate the necessary adjustments to the workplace.
Government Response
In response to the report, the government announced a comprehensive partnership with over 60 companies, including many large employers, to “combat the rising tide of illness that is forcing people out of work”. Companies include Tesco, Google UK, Nando’s and John Lewis. Over the next three years they will “develop and refine approaches to workplace health” aimed at “reducing sickness absence, improving reintegration rates and increasing disability employment rates”.
Future Plans
The government aims to develop these changes into a voluntary certified standard by 2029. Speaking to the BBC, Work and Pensions Secretary Pat McFadden said the report was a "win-win for workers and employers as it aims to keep people with illness or developing disability issues in work".
Expert Opinion
Ruth Curtice, chief executive of the Resolution Foundation think tank, said: "The review accurately identified a culture of fear, a lack of support and structural barriers to work as key challenges that need to be overcome to turn the tide on the UK’s economic inactivity problem – which is currently trending in the wrong direction." The CIPD, which represents HR professionals, welcomed the government’s vision for a preventative approach to illness in the workplace. But its chief executive Peter Cheese said: “The success of the report will depend on the extent to which these recommendations are understood by business to deliver positive outcomes, and supported by policymakers at national and regional levels.”
