Sir Charlie Mayfield says illness puts millions of people out of work and costs employers and the economy billions – but the problem is “not inevitable”.
Britain is at risk of a “crisis of economic inactivity” as the number of unemployed sick and disabled people continues to rise, according to a government-commissioned review led by Sir Charlie Mayfield, the former chairman of John Lewis.
The report warns that 800,000 more people are unemployed for health reasons than in 2019, costing employers £85 billion a year in lost productivity, sick pay and staff turnover. Without intervention, an additional 600,000 workers could leave the labor market by 2030.
“This is not inevitable,” Sir Charlie said as he launched a new taskforce to help people get back to work and tackle what he described as a “vicious cycle” of poor health and economic inactivity.
The report, commissioned by the Department for Work and Pensions (DWP) but prepared independently, found that one in five working-age people are now unemployed and not looking for work – a significant turnaround after decades of improving labor force participation.
Sir Charlie said illness was costing Britain far more than just business losses.
“Work is generally good for health, and health is good for work,” he said. “For employers, sickness and staff turnover mean disruption and loss of experience. For the country, it means weaker growth, higher social spending and greater pressure on the NHS.”
By some estimates, sickness-related inactivity costs the wider economy £212 billion a year – almost 70% of annual income tax revenue – in lost production, benefits and additional healthcare costs.
The Office for Budget Responsibility (OBR) expects spending on health and disability benefits for working-age people alone will reach £72.3 billion by 2029-30.
Mayfield said the increase is being fueled by a “sharp increase” in mental illness among younger workers and chronic musculoskeletal problems – such as back pain and joint problems – among older employees.
His taskforce will also work with GPs, who he says are often pressured by patients to write sick notes but find it difficult to assess whether someone could work in a modified role.
Business groups broadly welcomed the taskforce but warned that parts of Labour’s employment rights bill risked discouraging companies from employing people with existing health problems.
The bill imposes guaranteed working hours and restrictions on zero-hours contracts – measures that some retailers fear will make flexible hiring more difficult.
Helen Dickinson, chief executive of the British Retail Consortium, said retailers were committed to supporting employees suffering from health problems but “the Government’s objectives and policies are at odds”.
“While they encourage employers to invest in the health of their workforce and offer flexibility, they risk making it more difficult,” she said.
In response to the report, the government announced a partnership with over 60 major employers, including Tesco, Google UK, Nando’s and John Lewis, to test new health and wellbeing initiatives aimed at reducing sickness absence and improving return to work rates.
Over the next three years, these programs will form the basis for a voluntary national workplace health standard, expected by 2029.
Work and Pensions Minister Pat McFadden said the partnership was “a win-win for employees and employers”.
“This is about keeping good, experienced staff in the workplace and helping people stay healthy longer,” he said.
Ruth Curtice, chief executive of the Resolution Foundation, said the research accurately identified “a culture of fear, a lack of support and structural barriers to work” as the main causes of the UK’s worsening inactivity rates.
The CIPD, which represents HR professionals, welcomed the focus on prevention. Its chief executive Peter Cheese said the report’s success “will depend on how well its recommendations are understood by business and supported by national and regional policymakers.”
Dr. Roman Raczka, president of the British Psychological Society, said the move to “rehumanise the workplace” was overdue, but warned that not everyone could or should return to work.
“The workplace itself can be a cause of poor mental health,” he said. “Those who call in sick deserve timely access to safe and compassionate care.”
