The UK is facing a “quiet but urgent crisis” on workplace sickness that costs the country around seven per cent of GDP each year, a review by former John Lewis boss Sir Charles Mayfield has found.
The Keep Britain Working Review, an independent report by Mayfield for the Work and Pensions (DWP) and the Department for Business and Trade (DBT), has uncovered the costs of ill health for the UK economy. The report found that poor workplace health trends cost firms around £85 million a year as Mayfield warned that the country was “sliding into an avoidable crisis”, holding growth back and leading people to be more dependent on the state.
More than half of the costs of ill health on the UK economy, calculated at £47 billion, are from lost output when employees cannot work. Lost productivity and administrative costs from litigation or recruitment also add to the costs on the UK economy.
In response to the report, over 60 employers including British Airways, Jaguar and Rover and Rio Tinto confirmed they would work with the government to change workplace health and approaches over the next three years.
“Work can be demanding. Setbacks are part of life. Health and work are not always easy partners, but they are morally reinforcing”, Mayfield said. He also said workers often had to take “personal responsibility” for leaving jobs due to ill health, with 800,000 more people now out of work than in 2019, due to health problems.
The Mayfield report also threw a spotlight on the rising numbers of economic inactivity among young people due to long-term sickness, with the number of 16 to 34-year-olds out of work due to a mental health condition rising by 76 per cent between 2019 and 2024.
The review, which was conducted over 10 months, underlined how 93 per cent of sick notes in England deemed patients “not fit for work” and could be extended without consultation. Mayfield said that sick notes could sometimes be “problematic” and become a “barrier to contact, further embedding distance between employer and employee.”
A key recommendation in the report calls on employers to take on greater responsibility for individuals’ health in addition to the NHS and workers themselves. Work and pensions secretary, Pat McFadden said more employers could help staff swiftly return to work after sickness.
He said: “Employers are uniquely placed to make a difference, preventing health issues where possible, supporting people when issues arise, and helping them return to work”, McFadden said.
Deputy director of public policy, Jane Gratton, at the British Chamber of Commerce (BCC) said: “This report is a hugely important contribution to tackling the issue and helping businesses access and retain a skilled workforce”.
Meanwhile, firms across the private sector are braced for a “difficult winter ahead as activity is forecast to downturn across UK services due to mounting tax fears, new research has indicated.
Bosses’ eyes are firmly set on the Chancellor Rachel Reeves’ next Budget later this month, with business leaders urging the government to fix the HMRC’s complex systems and provide greater stability over the next year.
A leading survey by the Confederation of British Industry (CBI), considered to be one of the UK’s most influential business groups, has suggested that private sector activity would fall in the next three months.
Its weighted balance for expectations in the next three months remained at -20 in October, while its output volume figure for the previous three months was also left at a low not recorded at any time over the last two years.
The CBI’s deputy chief economist Alpesh Paleja said firms across the private sector faced a brutal few months ahead amidst mounting speculation of tax hikes coming at the Budget. “Firms are facing a difficult winter, with private sector momentum weak and confidence fragile”, he said.
Andy Jalil
The writer is our foreign correspondent based in the UK.
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