UK policy reforms needed to shift dial on economic participation of long-term sick

CIPD research, supported by Simplyhealth, shows ill-health has been a growing concern for organisations over the past few years. Our 2023 findings show sickness absence rose to an average of 7.8 days per employee per year, an increase of two days since 2019 and its highest level in 15 years.

The rise in economic inactivity due to ill health impacts on the economy, employers, and workers themselves. Conversely, it’s now proven that ‘good work’ is good for health, can reduce health and economic inequalities, and boost productivity.

Urgent public policy reform at scale needed to shift the dial

Aside from the dubious effectiveness of imposing benefits sanctions on people with long-term health conditions as an incentive to work, some key proposals to boost economic participation are positive. These include the expansion of employment support services for people living with long-term ill health, the planned WorkWell pilots, as well as embedding employment support within mental health and musculoskeletal health services in England.

Ultimately, the success of plans for welfare reform to support people with disabilities and long-term health conditions into employment will depend on whether there is enough tailored and bespoke support available. Adequate resourcing to achieve impact with the proposals is key, but they could also fall far short if they are not implemented at the scale needed to shift the dial on economic participation rates.

But what other public policy reforms are needed to create the step change to improve the health of the working age population and close the persistent disability employment gap?

• A national occupational health service: The CIPD welcomes the focus on creating wider access to quality occupational health provision such as the SME pilots currently running that provide an 80% subsidy for SMEs. For firms at the larger end of the SME spectrum, this could prove effective. But for very small employers with less than 50 employees, affordability is a huge barrier and OH provision must be free to shift the dial at scale in terms of OH coverage in this sector.
• Investment in good people management: Effective use of OH services also relies on organisations and managers to implement the advice they receive, for example, when making effective, reasonable adjustments for people. CIPD evidence shows that, when times are tough, support from line managers is one of the key resources that can help prevent or mitigate the risk of stress and burnout. Other CIPD research shows clear links between line manager quality and employee health, especially mental health – for example, half (50%) of employees with bottom-quartile managers thought work had a negative (or very negative) impact on their mental health, compared with one-seventh (14%) of employees with a top-quartile manager.
  
  Evaluation of the CIPD’s HR business support pilots, which aimed to build HR capability in small UK firms, shows the challenges of engaging small firms in support services and the importance of an OH model that is integrated with existing business support structures and networks. Small employers are unlikely to engage as a first step with an accreditation scheme or a national health at work standard, for example, but need easy access to local, quality OH services at the point of need.
• Stronger enforcement of employers’ obligations: The Health and Safety Executive (HSE) should have the necessary resources to encourage employers to meet their existing legal duty to prevent and manage stress at work, whether in workplaces or when people work remotely. It should be empowered to investigate organisations where stress at work is systemic, with these employers required to use the HSE’s stress management tools to identify and act on psychological health risks. Employers that continue to fail to address the main causes of stress at work, such as excessive workloads, bullying or poor management, should face improvement notices and, if necessary, further enforcement action.
• Reform and enhance Statutory Sick Pay: The CIPD has been calling for reform and enhancement of Statutory Sick Pay (SSP), first by removing the lower earnings threshold and raising the rate to the equivalent of the National Living Wage, to be paid from day one of absence; both the CIPD and SOM believe SSP should be more flexible to support phased returns to work.
• Fit note reform: So far, fit note reform hasn’t achieved its goals of supporting more people with ill health to remain in work, for example through phased return to work. The current proposals include ‘Trailblazer trials’ that are testing changes to make referrals to health and employment services easier, but we look forward to the government’s 2024 consultation on wider reforms such as providing individuals whose health affects their ability to work with rapid access through the fit note process to specialised support for a return to work.
• A national director for work and health: Nominate a national director of work and health role to ensure continued joined-up public policy across government and build awareness and confidence as part of a national employer-led campaign to improve health at work outcomes.

The CIPD will continue to engage with employers and policy-makers in shaping these ideas. The CIPD has also been invited to join the Government's Occupational Health Taskforce.