Tory reforms failing to reduce the sickness benefits bill, report says
IPPR report urges reform to sickness benefits to ensure the system is 'fit for modern health conditions'.
IPPR report urges reform to sickness benefits to ensure the system is ‘fit for modern health conditions’.
Government attempts to reduce the number of people claiming sickness have failed because not enough has been done to prevent sick people from falling out of work in the first place, an influential thinktank has said.
A new report from the left-leaning IPPR thinktank urges reform to sickness benefits to ensure the system is “fit for modern health conditions, as the amount spent on sickness benefits is expected to reach £2.4bn by the end of the decade – up from £1.7bn in 2015.
The IPPR says both government and employers need to do more to “stem the flow of people falling out of work and onto benefits”, with the number of people with mental health problems on sickness benefits increasing from a third to half in the last two decades.
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The report also finds that some businesses are deliberately avoiding paying sick pay to employees who need time away from work due to poor health, costing the government up to £143 million a year, and calls for new rules that would require employers to “draw up ‘back-to-work plans’ once employees have been off for four weeks”.
Failure to comply with these rules would make employers liable for a further six months of sick pay, saving the state an estimated £96 million a year.
The government should also introduce tough new fines for the minority of employers who fail to pay staff sick pay, amounting to the equivalent of a year’s Statutory Sick Pay at £4,511.
And a new, flexible ‘Fit Pay’ payment for employees on sick leave would allow them to reduce their hours temporarily but remain in work, helping to prevent them from falling out of employment entirely and onto sickness benefits.
Those who are unable to continue working would receive support through the new system to slowly return to work on a part-time basis, gradually increasing their hours until they are able to return to the number of hours they had worked previously.
Joe Dromey, Senior Research Fellow at IPPR, said: “Governments have talked tough for years about cutting the sickness benefits bill. But they have failed as too little has been done to keep people well in work, and reduce the flow on to sickness benefits.
“More and more people are suffering from mental health conditions in work. But our sick pay system has failed to keep up with these changes.
“So we’re calling for employers and the state to do more to keep people well in work. Our proposal for Fit Pay will do just that, helping employees who develop a health or mental health condition to manage their condition and stay in touch with work.
“And we need to take action against the small minority of employers who are denying sick employees their right to sick pay, and leaving the state to pick up the bill.”
Dr Clare Gerada, former chair of the Royal College of GPs said: “For too long we have seen supporting health and mental health as the responsibility only of hardworking GPs and the wider NHS, ignoring the vital role employers could and should play.
“We’ve waited for people to fall ill, and fall out of work, before stepping in. As a result, we’ve failed to reduce the number of people out of work on health-related benefits.
“As this insightful report highlights, employers need to play their part both in promoting the health and well-being of their workforce, and in supporting people back to work when they fall ill.
“If the government wants to deliver on its target of reducing the disability employment gap, it should look at these recommendations.”
Seamus Nevin, Head of Employment and Skills Policy at the Institute of Directors added: “The dignity of a job and the security of a pay cheque should be available to all those who aspire to it.
“Employers have an important responsibility to help look after the physical and mental health of their employees.
“The proposals in this report highlight how changing the incentives and liabilities for employers can be a powerful driver for improving workplace culture and practices.
“Given the ways employment is changing, it is increasingly important that employers respond to the challenges of wellness in work”