[Skip to content]

Sign up for our daily newsletter
The Actuary The magazine of the Institute & Faculty of Actuaries

Independent review aims to reduce cost of sickness

Around 11 million employees take sick leave annually, and while most return to work, around 300,000 people go on to claim health-related benefits, costing the taxpayer £13bn a year, and the country £15bn in economic output.

According to the review, too often the sickness absence system pushes people away from work and provides little support for them to return to work quickly. With this in mind, the reviewers have made a number of recommendations aimed at reducing the human and financial cost of needless sickness absence in the UK.

• For employers tackling sickness absence in the workplace, a key barrier to getting people back to work is that the vast majority of fit notes declare employees to be completely incapable of work. Therefore, the Review recommends a new Independent Assessment Service (IAS) that employers and GPs can refer long-term sickness absence cases to for bespoke advice. Employers stand to gain around £100m a year from reductions to sick pay bills from using this service

• The Review recognises that a significant minority of people can work but not in their current job. Currently, the State does not intervene to support job searches until after someone has left work. By then, they are harder to help. The Review recommends that the state introduces a new job brokering service for employees on long-term sickness absence who are unable to return to their current employers. This service could save the State up to £300m a year by reducing the benefits bill.

• Although the Review is focussed on job retention, some people will inevitably flow in and out of the benefits system. The Reviewers have observed that the current State benefits systems fails claimants with will-health by directing too many people to Employment and support Allowance but subsequently declaring most people fit for work after a long delay. The Review recommends the removal of the assessment phase for claimants of Employment and Support Allowance. This will allow those claimants who need support to get it sooner and those that can work to help find a job more quickly. It is estimated this would save the taxpayer £100m each year.

Former British Chamber of Commerce director general, Frost said: "Evidence clearly shows that the longer you are out of work the harder it becomes to get back in. But in many cases sickness absence is sue to health conditions that are nonetheless compatible with work - and can often be improved by work.

"The current certification system does not provide employers with the advice they need to make informed decisions about their employees' capability to work. The establishment of the independent Assessment Service will provide practical support and help to allow employers to make informed judgements about return to work for their staff."

Dame Black, national director for health and work, said: "Sickness absence from work can be unavoidable, but when unduly prolonged it is wasteful and damaging. We believe we have presented an urgent and compelling case to change the current system so that it unashamedly promotes work for those that can.

"If implemented these recommendations will ensure many more people with health conditions are able to enjoy the benefit of work; far fewer will needlessly lose work and fall into long-term benefit dependency."

Minister for Employment Relations, Edward Davey, said: "Sickness absence is an issue that affects everybody. The current system lets down individuals, businesses and tax payers which is why this review is such an important piece of work. As part of our efforts in reviewing employment-related law and removing the burdens on business, we have the opportunity to make a real difference - tackling sickness absence properly can increase business confidence, boost growth and help get people back to work. Getting the system right is a potential win-win situation so we will be looking at these proposals with interest."