Government announces review into sickness absence system

The government has announced a major review into the current sickness absence system to reduce the cost of ill-health to the economy.

Announced at the same time as news of the government’s Welfare Bill was delivered, the review will explore new ways of how the current system can be changed to help more people stay in work.

Jointly chaired by David Frost, director general of the British Chambers of Commerce and Dame Carol Black, national director for health and work, the review will explore how the current sickness absence system could be changed to help people stay in work, reduce and share costs for the taxpayer and businesses, and contribute to economic growth.

It will examine whether the balance of these costs are appropriately shared between individuals, employers and the State, and make tangible recommendations for change.

The review will also ensure recommendations for change are consistent with promoting private-sector growth and minimising burdens on business, in particular small and medium-sized businesses.

The government also announced an additional £12 million of funding for health and work programmes, including the Fit for Work Service and occupational health advice lines.

Black said: “From my work as a doctor and now as national director for health and work, I have seen the damaging effects of prolonged sickness absence on individuals and their families, and on the wider community, besides the costs to business and the economy.”

Frost added: “Sickness absence undoubtedly has a huge impact on businesses – particularly on smaller firms that struggle with the processes and procedures required, not to mention the direct costs involved.

“The private sector must focus on growth if we are to sustain the recovery, so it is right the government has chosen to look at ways to reduce sickness absence in the workplace and get people back into employment.”

Katharine Moxham, spokesperson for Group Risk Development (Grid), the industry body for corporate group protection, said: “As an industry heavily involved in occupational rehabilitation, we fully appreciate the importance of financial motivation in getting someone back into the workplace.

“Replacing the UK’s current complex working age benefits and tax credits structure with an integrated payment to ensure that work always pays makes consummate sense.

“This is an enormously bold move which could have huge positive impact for British business in the long term. Making it work will mean changes for both employees and businesses.

“We advise businesses to consider what this means for them since they will increasingly be expected to accommodate people back into the workplace. The group risk market is already extremely well placed to support employers with this.”

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