Sickness absence system reviewed

The Government today launched a review into the sickness absence system, saying it wanted to tackle the "staggering" £100 billion cost to the economy every year.

The review will examine "radical" new ways of helping more people stay in work and reduce the cost of sickness to businesses as well as the wider economy.

David Frost, director general of the British Chambers of Commerce, and Dame Carol Black, a government adviser on health, will lead the review, which will report later this year.

Ministers said that under the current system, employers had to bear the costs of short-term sickness, with taxpayers absorbing the cost of longer-term ill health.

The Government said it was determined to end the "vicious cycle" of people being out of work then seeing their health deteriorate even further.

Lord Freud, Minister for Welfare Reform, said: "Too many people, through no fault of their own, have fallen on to a life on benefits because of the failures in the sickness absence system. This isn't fair to the taxpayer but most of all it isn't fair to the individual.

"We all have a stake in reducing sickness absence, but it's not clear who is best placed to take responsibility for this change."

Employment Relations Minister Edward Davey said: "This is an important review which will help tackle the problems faced by business and individuals. Managing sickness absence more effectively will be a win-win situation for all - businesses, individuals, the taxpayer and crucially, the economy. It could improve productivity, boost growth and mean that many more people no longer have to rely on taxpayer handouts."

Mr Frost said: "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 that the Government has chosen to look at ways to reduce sickness absence in the workplace and get people back into employment."

TUC General Secretary Brendan Barber said: "If this were to be a genuine attempt to support those on long-term sickness get back to work then the TUC would welcome it with open arms. However we are concerned that it will end up as just another part of the Government's cost-saving onslaught on the income and rights of those at work, and those on benefits.

"The fact that the review is being conducted by a leading voice of employers' interests, with no corresponding involvement from unions representing workers affected by sickness absence, gives us little confidence in the outcome."