Sick notes should be replaced and companies offered financial incentives to retain staff to tackle the “crisis” of sickness-related worklessness, a major government review has recommended.
Firms that take tackling work sickness seriously should have access to tax reliefs or sick pay rebates, as well as being given priority for government contracts, the review said.
And fit notes – which have become a “barrier to contact” between employer and staff – should be reformed or replaced with a new NHS App service that offers early intervention and support when someone becomes unwell, the report said.
The review said that government incentives – such as national insurance adjustments – should be offered to employers who are helping to reduce the numbers of economic inactivity.
The i Paper revealed last month that ministers are looking at expanding tax incentives to subsidise the cost of hiring young workers to complement the government’s Youth Guarantee pledge to get all under 24s into education or employment.
Sickness-related worklessness costs 7 per cent of GDP
The recommendations have been made in a long-awaited report by ex-John Lewis boss Sir Charlie Mayfield, which said poor workplace health is costing employers £85m a year.
Worklessness due to sickness costs the country 7 per cent of GDP and, overall, ill-health costs the UK economy around £212bn a year in lost output, it said.
Mayfield proposed a total overhaul of how sickness is dealt with in the workplace, arguing that employers have a share in responsibility alongside staff and the health service.
He said 93 per cent of fit notes – the formal name for sick notes – in England deem the patient “not fit for work” and are “often” extended without further consultation.
GPs are being asked to assess both the treatment needs of a patient and their capacity to work “despite most lacking occupational health training and time to get into sufficient detail”, he said.
Instead, Mayfield proposed a new workplace health provision which could eventually be on the NHS App as a “non-clinical case management service” helping managers by offering advice and early intervention.
Earlier this year, The i Paper revealed ministers were looking to overhaul fit notes to cut unemployment, suggesting the Government will be willing to take forward Mayfield’s suggestions.
On Wednesday, the Government is set to announce the launch of so-called vanguard employers to pioneer a new strategy to address mental health at work, retention of older people and improved participation of disabled people in work.
More than 60 employers – including the British Beer and Pub Association, Burger King, John Lewis and Google UK – have signed up.
Government already overhauling support
The proposed reforms should come alongside the government’s welfare reforms and overhaul of employment support, Mayfield said.
The government has already cut the value of out of work sickness benefits for new claimants of the universal credit health element (UC health) in order to try to reduce what they say is an “incentive” for people to be signed off sick.
And Work and Pensions Secretary Pat McFadden is considering plans to restrict the availability of UC health for those under the age of 22, so only those with the most severe conditions are eligible.
Mayfield warned that workers must also play their part and, while supportive workplaces matter, “so does personal responsibility”.
But mental health experts have warned efforts to tackle out-of-work sickness will fail without a proper cross-departmental mental health strategy.
A Mental Health Foundation report, due to be published later this week but seen by The i Paper, calls for a cross-government plan on mental health to tackle issues such as employment-related challenges.
The research, conducted by more than 50 experts, said that to deal with mental health, a cross-Whitehall strategy must address financial insecurity, housing, identity-based mistreatment, employment, social connection, and access to health support.
Mark Rowland, head of the Foundation, told The i Paper: “Until a cross-government mental health plan is rolled out across Whitehall, politicians will continue to struggle to explain why individual policy announcements are not doing enough to stem the increasing numbers of us experiencing poor mental health.
“Much of the work undertaken in the last 12 months to address poor mental health, including the Mayfield Review, is commendable, but it is simply not enough to get to grips with a crisis of this magnitude.”
Reeves: Young people better served in work
It comes as Chancellor Rachel Reeves said there are “many young people who are struggling with mental health” who are “often much better served if they are in work and given the support to get back into work”.
Speaking to LBC, Reeves said that welfare was “certainly not working for young people” and so must be reformed.
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Despite being forced into a U-turn on earlier attempts to cut disability benefits, Reeves said: “The lesson is that we need to take people with us on that journey. But the lesson is certainly not that we should give up on reform.”
Mayfield said there are 800,000 more people out of work now than in 2019 due to health problems – which could rise by another 600,000 by 2030.
He said the increase in 16 to 34-year-olds with a mental health condition who are economically inactive due to sickness is “particularly concerning”, rising by 190,000 (76 per cent) between 2019 and 2024.
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