Is Britain on the brink of an economic crisis? A startling new report reveals that the rising number of sick and disabled individuals unable to work has put the UK at significant risk of what is being termed an "economic inactivity crisis." This situation could jeopardize the country's overall prosperity in the near future.
Recent figures indicate there are currently 800,000 more individuals out of work since before the pandemic in 2019, all due to various health conditions. This trend is imposing a staggering annual cost of £85 billion on employers, as highlighted in a review led by Sir Charlie Mayfield, the former chief of John Lewis.
The potential for this issue to escalate is considerable unless proactive measures are taken. Sir Charlie, who is slated to spearhead a taskforce aimed at aiding individuals in their return to employment, emphasized that this worsening situation is "not inevitable."
While many have received this initiative positively, some business organizations have raised concerns that the current Labour's Employment Rights Bill may inadvertently deter employers from hiring individuals who already have health issues. This indicates a complex relationship between improving workplace inclusivity and addressing the concerns of businesses.
According to the report, one in five people of working age is currently out of work and not actively seeking employment. This situation is alarming and has been independently produced under the auspices of the Department for Work and Pensions. The consequences could be even more drastic: without timely interventions, an additional 600,000 people could exit the workforce due to health-related reasons by the close of this decade.
Sir Charlie further explained that illnesses not only cost employers £85 billion annually through lost productivity and sick pay, but they also take a toll on the nation's economic landscape. "For businesses, the repercussions of employee sickness and turnover result in disruptions, costs, and a loss of valuable experience. From a national perspective, this leads to slower growth, increased welfare expenditures, and greater strain on the National Health Service (NHS)," he stated.
In an interview with the BBC, he reinforced the connection between work and health, noting that “overall, work and health support each other.” Keeping individuals engaged in their jobs and encouraging them to remain active can significantly enhance their well-being.
What’s even more striking is that the government spends about £212 billion each year on illness-related inactivity. This figure represents nearly 70% of income tax and stems from the dual effects of diminished productivity and heightened welfare needs combined with the additional burdens placed on the NHS.
To tackle this growing crisis, Sir Charlie suggested that a collaborative perspective on health—where it is perceived as a collective responsibility between employers, workers, and health services—could inspire more individuals to remain active in the workforce.
"I want to find a job"—these are the heartfelt words of Loz Sandom, a 28-year-old individual who is grappling with both mental and physical health challenges, making it tough for them to secure employment. Having last held a job a year ago, they expressed a strong desire to work, stating, "I am willing to do the work, and I want to. I want to find a job." Although Loz possesses a degree in illustration and a background as a digital marketing executive, they noted that a significant barrier lies in employers not recognizing their legal obligation to offer reasonable accommodations.
"It’s a tremendous loss for companies since they overlook numerous exceptional disabled individuals capable of contributing significantly to their workforce," Loz lamented. "I don’t place full blame on employers; they require support as well. There are numerous measures that could be taken to assist employers and, in turn, help workers succeed."
In response to these findings, the government has announced a substantial collaboration with over 60 businesses, including major employers like Tesco, Google UK, Nando’s, and John Lewis, to combat the escalating problem of health issues causing a workforce drain.
Over a three-year period, these companies will work on developing and refining workplace health strategies that aim to reduce sickness absence, enhance rates of employee return, and increase the employment rate of individuals with disabilities. The ultimate goal is to establish these improvements into a voluntary certified standard by the year 2029.
Pat McFadden, the Secretary of Work and Pensions, expressed to the BBC that this report represents a "win-win for both employees and employers, as it seeks to keep working individuals who are facing health issues or developing disabilities engaged in their jobs." He argued that this is advantageous for employers because these workers often possess valuable experience and expertise, and for employees, the desire to remain in work is typically strong if circumstances allow.
Ruth Curtice, the chief executive of the think tank Resolution Foundation, emphasized that the review successfully pinpointed key hurdles—a climate of apprehension, a lack of support, and systemic barriers—as major challenges that need addressing to positively influence Britain’s prevailing issue of economic inactivity, which is currently on an unfavorable trajectory.
The Chartered Institute of Personnel and Development (CIPD), an organization representing human resources professionals, acknowledged the government’s forward-thinking approach towards illness prevention in the workplace. However, its chief executive, Peter Cheese, cautioned that the effectiveness of the report's recommendations relies heavily on how well they are understood and implemented by businesses, as well as the backing they receive from policymakers at both national and local levels.
Notably, this report unfolds while the government pushes ahead with its Employment Rights Bill—legislation criticized by some businesses for potentially hindering economic growth. The proposed law would guarantee workers set hours and impose restrictions on zero-hour contracts that do not provide corresponding opportunities for work.
Additionally, Chancellor Rachel Reeves is pursuing an initiative to ensure that young people who have been unemployed for 18 months receive guaranteed paid work. Those who choose not to accept this opportunity could face the possibility of losing their benefits.
So, what do you think? Is the approach to improving workplace inclusivity sufficient to address the economic challenges posed by health-related inactivity? Will the potential legislation hinder or help businesses? We’d love to hear your thoughts in the comments below!
