Industry urges radical action to tackle sickness absence

14 June 2016

Recent research shows that long term absence is continuing to increase while, at the same time, the NHS is proving unable to support the working age population by providing timely and effective rehabilitation and medical treatment. The research also shows a further fall in employers’ confidence in GPs to improve return to work rates with the effectiveness of the ‘fit note’ system continuing to deteriorate.

Britain’s manufacturers are urging tax breaks to tackle the UK’s chronic sickness absence problem, which would encourage more employers to pay for private treatment for employees and ease the burden on an under pressure NHS.

The research conducted by EEF and Jelf found that only 1 in 5 of manufacturers currently pays for non NHS medical treatment and that 60% of manufacturers would pay for private treatment if the cost was offset.

Two fifths of manufacturers say long term absence increased in last 2 years and that the NHS is not meeting the needs of 40% of manufacturers to get employees back to work. According to the research manufacturers pay out £0.6 billion a year in sick pay, equating to £211 per employee.

According to EEF, more fiscal incentives to encourage employers to provide private healthcare is required as part of efforts to tackle the UK’s productivity puzzle, believing that a fit and healthy workforce is an essential component of economic growth.

EEF has made the following recommendations:

  • Review the current levels of employer taxation for employer led health interventions where they are currently taxed as benefits in kind.
  • Carry out sensitivity analysis of different fiscal incentives such as changes to allowable business expenses, tax credits and tax relief.
  • Treat tax relief for Private Medical Insurance (PMI) in the same way as the £500 tax exemption for treatments recommended by the Fit for Work service.
  • Consider tax relief on Income protection insurance or group income protection (GIP) as a means of providing sick pay and rehabilitation support to employees through employers.
  • Provide some form of fiscal incentive to companies who fund treatments as part of rehabilitation which would otherwise have had to be provided by the NHS, or which prevented state Employment and Support Allowance (ESA) payments.

The survey covered 306 companies. The full report can be accessed here.