Supporting individuals with health issues to remain in the workforce could potentially save the UK government over £1 billion, according to a report urging ministers against reducing benefits. This comes as Chancellor Rachel Reeves is searching for savings ahead of the 26 March spring statement. The cross-sector Commission for Healthier Working Lives advocates for a new strategy to assist the 8 million people in Britain with work-limiting health conditions.
A separate analysis by the Trades Union Congress (TUC) revealed that days lost to work-related ill health have surged by a third since 2010 to a staggering 34 million days, costing the UK economy more than £400 million weekly. This underscores the significance of the government’s employment rights bill, set to return to parliament, aimed at improving work quality in the UK.
Paul Nowak, TUC general secretary, emphasized the need to reform Britain’s low-rights, low-pay economic model that has seen significant challenges over the past 14 years. He noted that giving workers more control and predictability could foster a happier, healthier, and more robust workforce.
The Commission for Healthier Working Lives, comprising business leaders, trade unions, and health experts, argues that additional support to help people participate in the workforce would yield more in savings than it costs. They stress that maintaining people in employment is crucial for economic growth, reducing the benefits bill, and contributing to a healthier society.
According to the commission, focusing solely on short-term benefit savings and reducing NHS waiting lists without addressing the root causes may replicate past policy failures and limit impact. It calls for a significant change in job support for individuals with health conditions, suggesting that a more proactive approach could assist at least 100,000 more people in staying employed within five years, potentially saving £1.1 billion over that period.
The current system of support for individuals with poor health is described as fragmented, inconsistent, and too oriented towards helping people after they’ve left work rather than those still employed. The commission recommends a new “back to work offer” that guarantees people will not lose their benefits for at least 18 months if they are seeking employment. It also advocates for a vocational rehabilitation benefit to support the transition back to work, a review of the statutory sick pay scheme, and the implementation of a caseworker-led service to provide independent advice and wider support.
Britain stands out as one of the few developed countries with an employment rate lower than pre-Covid levels, due in part to a sharp increase in working-age adults leaving the labor force due to long-term sickness. The number of people out of work due to ill health is growing by 300,000 annually, making it challenging for them to return to work.
The Labour Party, under Secretary of State for Work and Pensions Liz Kendall, is expected to publish plans on welfare reform soon, amid reports of internal disagreements over how to cut the welfare bill. Kendall’s stance is that helping more people back into work is the most effective way to reduce benefits, though there are suggestions the Treasury might prioritize tax cuts or reduced spending elsewhere. Kendall dismissed notions of a rift with the chancellor and emphasized the importance of welfare reform to ensure a sustainable future for the benefits system, aiming to increase the employment rate to 80%.
Source: https://www.theguardian.com/business/2025/mar/10/support-people-ill-health-stay-in-work-could-save-uk-1bn
